The American Institute of Architects monthly Architecture Billings Index clocked in at 48.0 in February, contracting 1.3 points from January’s score of 49.3. 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 slowdown in the broader U.S. economy is uneven depending on sector and geography, and the February ABI release is no exception,” says Ali Wolf, the chief economist of ARCHITECT’s parent company, Zonda. “Mixed practice organizations are still in growth–mode while institutional, commercial/industrial, and multifamily residential have seen a decline in billings. Further, businesses in the West are outperforming elsewhere in the country.”
The scores for both project inquiries and design contracts also contracted in February. New project inquiries came in at 55.0, falling 0.2 point from January’s score of 55.2. Design contracts posted a score of 51.3, declining 2.1 points from January’s score of 53.4.
“The combination of an unsettled economy and high interest rates is causing investors and property owners to take a closer look at their plans for construction projects,” said AIA chief economist, Kermit Baker, Hon. AIA, in a press release from the organization. “While this is producing delays for some projects under design, architecture firms are reporting that prospects for future project work remain generally positive.”
The month-to-month changes in scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—largely shrank in February, with only one score remaining above 50.0. Billings in the Midwest fell 2.8 points to a score of 48.8, while billings in the West declined 0.9 point to a score of 50.4. Billings in the South expanded 0.4 point to a score of 47.3, and billings in the Northeast fell 2.5 points to a score of 48.4.
The scores for February’s sector billings largely remained below 50.0, with the exception of one sector. The commercial/industrial sector fell 1.0 points to a score of 45.8; the institutional sector decreased 1.7 points to a score of 46.9. The multifamily residential score rose 0.3 point to a score of 46.2, and the mixed practice sector increased 1.0 point to a score of 57.0. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.
Read more business news: Decline Slows for December Billings | Billings Slow Again in November | Moderated September billings reflect pressures in housing market