The AIA's monthly Architecture Billings Index (ABI) for March came in at a score of 47.8, a 2.5-point decrease from the previous month's score of 50.3. It was the first time in which the metric entered negative territory in 25 months. The ABI is a leading economic indicator of construction activity in the U.S. and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, regionally, and by project type. A score above 50 represents an increase in billings from the previous month, while a score below 50 represents a contraction.
“Though billings haven’t contracted in a while, it is important to note that it does follow on the heels of a particularly tough late winter period for much of the country,” said chief economist Kermit Baker, Hon. AIA, in AIA's press release. “Many indicators of future work at firms still remain positive, although the pace of growth of design contracts has slowed in recent months.“
In March, design contracts posted a score of 50.8—a 2.3-point decrease from February's score of 53.1, but still a sign of positive momentum, despite slowed growth and month-to-month fluctuations.
The scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—fell in all four regions in March, with just one region remaining above the threshold of 50. The billings score for the South fell 4.1 points to a score of 54.2. Meanwhile, design services fell by 4.4 points to a score of 47.2 for the West; by 8 points to a score of 43.5 for the Northeast; and by 2.6 points to a score of 48.7 for the Midwest.
In March, billings scores fell in all four individual industry sectors, all of which had shown growth since June 2018. The commercial/industrial sector's score decreased by 6.9 points to a score of 47, and the mixed practice sector's score fell by 4.1 points to a score of 53.1. The multifamily residential score decreased by 3.9 points to a score of 47.7, and the institutional sector dropped by 2 points to a score of 48.9. (Results of sectors are also calculated as three-month moving averages.)