The monthly Architecture Billings Index (ABI) came in at a score of 49.1 in September, down 4.6 points from August's score of 53.7, the AIA announced today.

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, and regionally, as well as by project type. A score above 50, as seen every month since February, represents an increase in billings from the previous month, while a score below 50, as seen this month, represents a contraction.

September's reading of 49.1 marks the end of seven consecutive months of growth in design services. The 4.6-point decrease in September billings came as a surprise following August's 3-point uptick in new project inquiries, which are considered to be the most reliable indicator of future billings. However, the new project inquiries index stayed strong in September with a score of 59.0. Despite September's decrease in billings (August new project inquiries came in at 62.5), billings will likely return to positive territory in October.

“We’ve seen unexpectedly strong numbers in design activity for most of 2017, so the pause in September should be viewed in that context,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “Project inquiries and new design contracts remain healthy, and the continued strength in most sectors and regions indicates stability industry-wide.”

Design contracts dipped 1.3 points from August's score of 54.2, to a score of 52.9 in September. This drop is not a cause for concern, as both inquiries and design contracts have stayed above the 50-point threshold every month in 2017—a sign that momentum is strong in the market despite month-to-month fluctuations in pace.

Regional billings, which, unlike the national score, are calculated as a three-month moving average, increased in two of four regions in August with all regions reporting scores above 50, indicating an increase in design services. The South and the West posted modest increases in billings month-to-month with 0.5- and 0.1-point gains, respectively. Design activity continued to pick up in the Northeast with a score of 54.3, a scant 0.6-point dip from July's score of 54.9. Continued growth in the Northeast is promising, as it was the only region to see billings fall below the 50-point threshold in April and May, and has lagged behind the South and Midwest regions consistently in 2017. The Midwest posted a healthy score of 52.5 in August, a 0.5-point dip from July's score of 53.0. The month-to-month decrease in billings seen in the Northeast and Midwest does not indicate contraction, but rather a slower pace of activity compared to a month prior.

Design activity across all four building sectors posted scores above 50 in September, marking the eighth consecutive month of growth. The commercial/industrial sector experienced the most activity in September with a score of 54.0, although September's score is 1.2 points lower than August's score of 55.2. The mixed use sector posted gains in September, with a 1.6-point increase to 52.2 from August's reading of 50.6. Activity in the institutional sector increased with a score of 51.0 in September, a 0.6-point increase from August's reading of 50.4. The pace of design activity in the residential sector slowed for the fourth consecutive month, but remained healthy in September with a score of 51.0, a 1.3-point decline from 52.3 a month prior. (Results of sectors are also calculated as a three-month moving average.)