AIA's monthly Architecture Billings Index (ABI) for August came in at a score of 47.2. This is a 2.9-point decrease from July's score of 50.1, a markedly downward swing. 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.
“The sizeable drop in both design billings and new project activity, coming on the heels of six months of disappointing growth in billings, suggests that the design expansion that began in mid-2012 is beginning to face headwinds,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “Currently, the weakness is centered at firms specializing in commercial/industrial facilities as well as those located in the Midwest. However, there are fewer pockets of strength in design activity now, either by building sector or region than there have been in recent years.” In August, design contracts posted a score of 47.2, a 1.8-point decrease from July's already-contracting score of 49.
The scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—fell in two of the four regions in August, with only one region posting a score above the threshold of 50. The billings score for that region, the West, remained consistent at 51.2 points. Meanwhile, demand for design services in the South fell 0.1 point to a score of 48.2 and in the Midwest demand fell by 2.5 points to a score of 46.4. Demand contraction softened in the Northeast by 0.8 point to 49.1.
Billings scores fell in three of the four individual industry sectors, but two remained above the threshold of 50. The commercial/industrial sector and the mixed practice sector decreased by 2.3 and 2.6 points, respectively, to scores of 46.9 and 46.3. The multifamily residential score fell by 0.1 point to a score of 50.5. The institutional sector rose by 0.8 point to a total of 50.6. (Like the regional billings, sector billings scores are also calculated as three-month moving averages.)
