Demand for design services has tempered, according to the November Architecture Billings Index (ABI), released today by the AIA, which reported an index score of 50.9. The November score is down from a mark of 53.7 in October. This score still reflects positive growth (any score above 50 indicates an increase in billings whereas a mark below 50 represents contraction) and marks the seventh consecutive month to do so. The AIA report attributes this to “sustained demand for apartments and condominiums, coupled with state and local governments moving ahead with delayed public projects.”
The new projects inquiry index was 58.8, nearly four points below that of October (62.7) and six points under that of September (64.8).
The AIA’s newest metric, which tracks new design contracts and can be used to predict the future direction of architecture billings, was 54.9, 1.5 points below October’s score of 56.4.
“Demand for design services has slowed somewhat from the torrid pace of the summer, but all project sectors are seeing at least modest growth,” said AIA chief economist Kermit Baker, Hon. AIA, in the AIA's press release. “Architecture firms are expecting solid mid-single digit gains in revenue for 2014, but heading into 2015, they are concerned with finding quality contractors for projects, coping with volatile construction materials costs and with finding qualified architecture staff for their firms.”
Here are the national and sector breakdowns for the November ABI report.
National Billings: November’s score of 50.9 is almost three points below that of October (53.7) and more than four points under September (55.2).
Project inquiries: The score in this category fell by nearly four points from October (62.7) to November (58.8).
Design Contracts: The values in the design contracts category didn’t change much from August to October, but fell 1.5 points from October to November.
Northeast: After experiencing three consecutive months of falling scores, the index stayed the exact same from October to November (46.7). This is the region’s third straight month in the red.
Midwest: After six consecutive months of growth, the Midwest’s index dropped to 49.8 in November, three points below that of October (52.8).
South: This region fared the best in November’s report—it is the only one to boast more than two whole years of consistent monthly growth. November’s score (57.9) exactly matches that of October.
West: In the region’s sixth consecutive month of growth, the index fell nearly two points from October (54.6) to November (52.7).
Multifamily Residential: This sector fared the best in the AIA report. November’s score of 56.8 is up from October’s 56.0.
Commercial/Industrial: Down slightly from October’s score of 51.0, the November score of 50.6 marks the eleventh consecutive month of growth for the sector.
Institutional: October’s score of 51.3 is down from October’s 52.8. This is the sector’s sixth consecutive month in the positive.
Mixed Practice: This sector experienced a 1.5 decrease from October (54.1) to November (52.6). This is the sector’s eighth straight month of growth.
Charts: Maggie Goldstone; Source: AIA Architecture Billings Index