The American Institute of Architects monthly Architecture Billings Index came in at 51.0, a 2.2 point decrease from June's score of 53.2. 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 demand for design services held in positive territory for July but showed signs of softening," says Ali Wolf, the chief economist of ARCHITECT's parent company, Zonda. "The housing market fell into contraction territory in July and there are signs that other real estate sectors are following a slower path of growth as well.”

New project inquiries moderated in July with design contract expanding slightly. New project inquiries posted a score of 56.1, falling 2.9 points from June's score of 58.2. Design contracts came in at 52.9, rising 0.7 point from June's score of 52.2. “Despite architecture services employment recently surpassing pre-pandemic levels, the ABI score this month reflects the slowest growth since January, and marks the fourth straight month with a lower score than the previous month, indicating a slowing trajectory in billings activity,” said AIA chief economist, Kermit Baker, Hon. AIA. “With a variety of economic storm clouds continuing to gather, we are likely looking at a period of slower growth going forward.”

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 July. Three out of four regional scores lost ground, with one score remaining below 50.0. Billings in the Midwest decreased 2.6 points to a score of 52.2, while billings in the West fell 6.1 points to a score of 51.7. Billings in the South rose 2.1 points to a score of 53.6, and billings in the Northeast decreased 0.3 point to a score of 48.4.

All four of July's sector billings scores remained above 50.0 while only one score increased slightly from its June values. The commercial/industrial sector fell 0.3 point to a score of 52.2; the institutional sector decreased 3.9 points to a score of 49.6. The multifamily residential score rose 0.2 point 52.8, and the mixed practice sector decreased 0.7 point to a score of 52.1. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.

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