WASHINGTON – July 24, 2024 – Business conditions remain soft at architecture firms in June with the AIA/Deltek Architecture Billings Index (ABI) reporting a score of 46.4. Any score below 50 indicates that billings decline, although somewhat fewer firms reported a decline in billings in June than in May.
"Architecture firms continue to face a period of economic uncertainty, driven by high interest rates and economic volatility,” said Kermit Baker, PhD, AIA Chief Economist. “This is the seventeenth consecutive month of a billings decrease and yet, despite the softness firms remain generally optimistic that conditions will start to improve once interest rates stabilize.”
Indicators of future work remained generally soft as well:
- Only slightly more than half of the responding firms reported an increase in inquiries into new work.
- Firms reported a third consecutive month of decline in value of newly signed design contracts.
- While many firms still have a healthy backlog of projects in the pipeline, 6.4 months on average, this is the smallest that backlogs have been in more than three years.
The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.
Key ABI highlights for June include:
- Regional averages: Northeast (52.2); Midwest (40.9); South (43.9); West (43.1)
- Sector index breakdown: commercial/industrial (42.0); institutional (44.3); mixed practice (firms that do not have at least half of their billings in any one other category) (46.9); multifamily residential (45.1)
- Project inquiries index: 51.6
- Design contracts index: 45.6
The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score.
Visit AIA’s website for detailed information about this, and past billing index reports.
ABOUT AIA
Founded in 1857, AIA consistently works to create more valuable, healthy, secure, and sustainable buildings, neighborhoods, and communities. Through more than 200 international, state and local chapters, AIA advocates for public policies that promote economic vitality and public wellbeing.
AIA provides members with tools and resources to assist them in their careers and business as well as engaging civic and government leaders and the public to find solutions to pressing issues facing our communities, institutions, nation, and world. Members adhere to a code of ethics and conduct to ensure the highest professional standards.
About Deltek
Better software means better projects. Deltek is the leading global provider of enterprise software and information solutions for project-based businesses and the home of AIA MasterSpec®. More than 30,000 organizations, including 12,000 Architecture & Engineering firms, rely on Deltek for superior levels of project intelligence, management, and collaboration. Our industry-focused expertise powers project success for A&E firms of all sizes by helping them achieve performance that maximizes productivity and revenue. Learn more at Deltek.
