In April, the American Institute of Architects’ Architecture Billings Index marked the first negative month of growth in the demand for architectural design services in nine months. With a national score of 48.6, down more than three full points from March’s score of 51.9, the architecture industry is seeing the first significant soft patch, spanning across all regions and industry sectors, in nearly a year. (A score above 50.0 in the index means that demand is increasing; below 50.0 means that demand is contracting.)
The score for project inquiries came in at 59.5, down from 60.1 in March. This means that inquiries are still growing, but it did break a streak of three straight months where the index for project inquiries not only continued to grow, but stayed above 60.
For April, the ABI’s data departs a little from the trends seen from the U.S. Department of Labor’s Bureau of Labor Statistics’ employment reports. The BLS reported 165,000 jobs added to the economy in April, which was slightly better than expected, with the architectural and engineering services sector of the economy adding 2,700 jobs in April. This bested the 2,100 architectural and engineering services jobs added in March, and I opined at the time that this would probably add a slight uptick in the ABI for April. (The ABI is released two weeks after the national employment report each month.) Before March, the industry had seen average growth of slightly more than 2,000 jobs per month.
Half of each of the nation’s four regions and the industry’s four sectors showed growth, while the other half slipped below 50. All except the South came in with a weaker score than it had in March. Those regions and sectors that are still in growth territory are closer to contraction in April than they were in March.
National Highlights:
Billings: At 48.6, down from 51.9, this is the first month of contracting billings after eighth straight month of growth. That streak was the best run of billings growth since January 2008.
Inquiries: At 58.5, down from 60.1, this breaks the streak of three straight months above 60.
Regional Highlights:
Northeast: At 48.2, down from 52.0, this month of contraction breaks a seven-month-long streak above 50, which was the longest positive run for the region since January 2008.
Midwest: At 49.4, down from 51.5, this month of contraction breaks a six-month-long streak above 50, which was the region’s longest positive run in two years.
South: At 52.6, even with last month, this is the tenth straight month above 50, the region’s best run since January 2008.
West: At 50.7, down from 51.5, this is the ninth straight month above 50, the region’s best run since August 2007.
Sector Highlights:
Multifamily Residential: At 52.0, while down from 55.2, this is still the sector’s twelth straight month above 50. Consistently the top-performing sector since the construction industry weakened and the financial crisis tanked the economy, this latest string of 50-plus scores is the longest run for the sector since March 2006.
Commercial: At 49.2, down from 50.2, this negative score breaks a six-month string of scores above 50, which was the best run for the sector in a year.
Institutional: At 50.1, down from 50.7, this is the sector’s ninth straight month above 50, which is its best run since July 2008.
Mixed Practice: At 48.6, down from 51.6, this negative score breaks a seven-month streak above 50, which was the best run for the sector since December 2007.
