AIA’s monthly Architecture Billings Index lowered in May but remained positive, falling 3 points from March's score of 56.5. 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 directional trend for the ABI matches the national economy: growing but slowing," explains Ali Wolf, the chief economist of ARCHITECT's parent company, Zonda. "Companies are thinking through their positioning for the next few years and are working closely with their architectural firms to understand the best use of their space.”
Both design contracts and new project inquiries expanded in May. New project inquiries posted a score of 63.9, rising 1.6 points from April's score of 62.3. Design contracts came in at 56.9 points, increasing 1.5 points from April's score of 55.4 . “The strength in design activity over the past three months has produced a broader base of gains. The Northeast region and Institutional sector have struggled with slow billings activity, but now have posted consecutive months of positive scores,” said AIA chief economist, Kermit Baker, Hon. AIA, in a press release from AIA. “With the improvement in inquiries and new design projects, demand for design services will likely remain high for the next several months, despite strong economic headwinds.”
The month-to-month changes in scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—moderated in May. Only one regional billing scores gained ground, but all four remained above 50.0. Billings in the Midwest decreased 0.8 point to a score of 56.8, while billings in the West rose 1.1 points to a score of 59.3. Billings in the South fell 5 points to a score of 52.3, and billings in the Northeast decreased 2.3 points to a score of 51.4.
All four of May's sector billings scores remained above 50.0 while decreasing from their April values. The commercial/industrial sector fell 3 points to a score of 57.7; the institutional sector decreased 0.1 point to a score of 51.7. The multifamily residential score fell 2.5 points 54.5, and the mixed practice sector decreased 5 points to a score of 56.2. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.
Sector index breakdown: commercial/industrial (57.7); mixed practice (56.2); multifamily residential (54.5); institutional (51.7)
