The Architecture Billings Index (ABI), the monthly economic indicator published by the AIA, has reported another drop, marking the third consecutive month with a score below 50–any score under 50 signifies a decline in billings from the previous month. The month of October reported a score of 44.3, this has further dipped from September’s low 44.8.
In a press release the AIA said the continued decline means “a significant share of firms is seeing a decline in billings.”
Kermit Baker, AIA’s chief economist, added to this sentiment with a statement: “This report indicates not only a decrease in billings at firms, but also a reduction in the number of clients exploring and committing to new projects, which could potentially impact future billings. The soft conditions were evident across the entire country as well as across all major nonresidential building sectors.”
In September’s report new project inquiries were still strong with a score of 54.8. In October and as the year closes out that number has taken a notable drop to 48.8.
As Baker shared, all regions of the country reported softening in their billings. As in September the region with the lowest score was the West at 40.0, down from 44.3. October scores for other regions were: Northeast, 42.1; South, 48.5; and Midwest, 48.9.
In addition to the national and regional averages the billings index also reports on building sectors. For much of 2023 firms working on institutional projects saw steady growth in billings with consistent scores above 50, as other building sectors, such as multifamily residential and mixed practice, saw a consistent decline in billings for the better part of the last year. In October the score for institutional billings dipped under 50 to 49.1, bringing the score for all of the sectors under 50.
While it appears that 2023 is likely to close on a low note, at least in terms of the architecture billings index, we must remain optimistic and remind ourselves it always bounces back.