From the AIA: Architecture Billings Index slows but remains strong
Architecture firms reported increasing demand for design services in May, according to a new report today from The American Institute of Architects (AIA).
The ABI score for May was 53.5. While this score is down from April’s score of 56.5, it still indicates very strong business conditions overall (any score above 50 indicates an increase in billings from the prior month). Also in May, both the new project inquiries and design contracts indexes expanded, posting scores of 63.9 and 56.9 respectively.
“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, PhD. “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.”
• Regional averages: West (59.3); Midwest (56.8); South (52.3); Northeast (51.4)
• Sector index breakdown: commercial/industrial (57.7); mixed practice (56.2); multi-family residential (54.5); institutional (51.7)
This graph shows the Architecture Billings Index since 1996. The index was at 53.5 in May, down from 56.5 in April. Anything above 50 indicates expansion in demand for architects’ services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
This index has been positive for sixteen consecutive months. This index usually leads CRE investment by 9 to 12 months, so this index suggests a pickup in CRE investment in 2022 and into 2023.