Architecture firms have experienced a two-month relapse, according to the American Institute of Architects' (AIA) Architecture Billings Index (ABI). Although the latest report indicated a smaller amount of contraction for the design industry in April than it experienced in March, the index values do still reflect another overall decrease in design activity.
The ABI score increased from 48.8 to 49.6 from March to April, but the data represents an overall contraction in the demand for architectural services. This is because the index scores are developed from a monthly survey in which participants report whether billings during the previous month significantly increased, remained about the same, or significantly decreased from the prior month. The index value represents the proportion of respondents selecting each option. If an equal share of firms report an increase as report a decrease, the score for the month will be 50. An index score above 50 indicates growth, whereas a score below 50 indicates contraction.
The score for new project inquiries is well above 50 and increasing. This month's index, 59.1, rose from 57.9 in March. This growth is consistent with the data from February to March.
More noticeably, however, the score for design contracts in April was 54.6, way up from 48.2 in March and 51.0 in February. Last month, the AIA added this new indicator to its report for measuring future growth within the design industry. It's a more concrete indicator of future billings activity than is the project inquiries.
Here are the national and sector breakdowns.
National billings: At 49.6, up from March’s 48.8, the national billings value may have increased, but the score is still in the red. The year started off with growth, but then billings declined in March.
Project inquiries: At 59.1, up from March’s 57.9, this score has stayed above 50 for over five years.
Design contracts: At 54.6, up from 48.2 last month, this metric reflects substantial growth in a category that has fluctuated in value over the last several months.
Northeast: April’s score of 42.9 is down from 45.5 in March. The last time this region saw a score above 50 was August 2013.
Midwest: At 47.0, up 0.1 points from March, this region hasn’t seen a score above 50 since October 2013.
South: The South is booming, with a score of 57.5, up from March’s 55.6. This marks the 22th month of growth for the region.
West: This region slipped from 50.0 in March to 48.9 in April, breaking a 20-month run of growth.
Commercial/Industrial: At 50.2, down from March’s 50.5, this is the sector's fourth straight month of growth.
Multifamily Residential: At 52.6, this sector fell slightly from March’s 52.7. While its score may be on a downhill slope of late, the sector has held a score above 50 since September 2011.
Institutional: At 47.1, this sector’s value has fallen for another month and hasn’t seen a score above 50 since August 2013.
Mixed Practice: At 50.7, this value rose from 48.9 in March, and is the first growth for the sector since November 2013.