AIA: Billings Expand in August

The American Institute of Architects monthly Architecture Billings Index came in at 53.3, a 2.3 point increase from July's score of 51.0. 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 ABI continues to be in expansion territory, which indicates that non-residential investments are still moving forward, albeit at lower levels seen at the beginning of the year," says Ali Wolf, the chief economist of ARCHITECT's parent company, Zonda. "Given the slowing trends in the broader economy, we are tracking to see how long this indicator remains above 50, the key level to track for market health.”

New project inquiries increased in August with design contracts softening. New project inquiries posted a score of 57.9, falling 1.8 points from July's score of 56.1. Design contracts came in at 52.3, falling 0.6 point from July's score of 52.9. “While a strengthening billings score is encouraging, the flat scoring across regions and sectors is indicative of a nationwide deceleration over the next several months,” said AIA chief economist, Kermit Baker, Hon. AIA. “A variety of economic storm clouds continue to gather, but since design activity continues to increase, we can expect at least another nine to12-month runway before building construction activity is negatively affected.”

The month-to-month changes in scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—moderated again in August. Three out of four regional scores lost ground, with one score remaining below 50.0. Billings in the Midwest decreased 0.8 point to a score of 51.4, while billings in the West fell 1.5 points to a score of 50.2. Billings in the South decreased 0.7 point to a score of 52.9, and billings in the Northeast rose 1.4 points to a score of 49.8.

All four of August's sector billings scores remained above 50.0 with one score increasing slightly from its July value. The commercial/industrial sector fell 1.0 points to a score of 51.2; the institutional sector increased 2.4 points to a score of 52.0. The multifamily residential score fell 0.8 point to a score of 52.0, and the mixed practice sector fell 0.9 point to a score of 51.2. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.