The Architecture Billings Index declined for the third consecutive month, reflecting the continued drop in demand for design services. June’s ABI score of 46.3 was nearly a full-point drop from May’s reading of 47.2, with scores over 50 indicating an aggregate increase in billings.
Among U.S. regions, only the West surpassed the 50 index mark, recording a 51.7 average to continue the region’s recent growth trend. The Midwest recorded the lowest score for the second-consecutive month at 44.6, while the Northeast and South also continued to experience a decline, finishing at 47.5 and 47.3, respectively.
“While a modest turn around appeared to be on the way earlier in the year, the overall concern about both domestic and global economies is seeping into [the] design and construction industry and adding yet another element that is preventing recovery,” said the association’s Chief Economist Kermit Baker, Hon. AIA, in a release Wednesday. Baker also noted that the threat posed by the federal government’s inability to settle the debt ceiling debate has resulted in higher interest rates for real estate projects.
The mixed-practice sector also saw an increase, with a reading of 51.5. The commercial/industrial and multi-family residential sectors were recorded at 50.0 and 49.6, respectively, while the institutional sector came in at 45.9.
The new projects inquiry index jumped more than 5 points from May to 58.1, continuing its rebound after a dip to 55.0 in April.
The Architecture Billings Index is produced by the AIA Economics & Market Research Group and provides an approximately nine- to 12-month forecast of nonresidential construction spending activity. The Index utilizes a monthly “Work-on-the-Boards” survey sent to a panel of AIA member-owned firms asking participants whether or not their billings increased, or if they stayed the same, as compared to the previous month. Regional and sector data are based on a three-month moving average.