Economy
ABI: Architecture Firms' Business Activity Steady In June
Written by Becca Moczygemba
July 20, 2023
Business activity at architectural firms was stable in June vs. May, though billings were still increasing, according to the American Institute of Architects (AIA)/Deltek Architecture Billings Index (ABI) score.
May’s rebound of 51.0, the highest reading since February, was slightly than June’s 50.1 index. Both readings are an improvement over April’s index of 48.5, and it’s the first time this year that there have been two consecutive increases in billings.
The ABI is a leading economic indicator for nonresidential construction activity with a lead time of 9-12 months. Note than any score above 50 indicates an increase in billings.
Inquiries for new projects remained strong, as did the number of new design contracts. The new design contracts index rose to 52.7 in June from 52.3 in May.
“Firms in nearly all regions of the country also reported improving business conditions in June, with firms located in the Midwest continuing to see the strongest billings for the eighth consecutive month,” AIA said in a release.
The strongest billings came from firms located in the Midwest for the eighth consecutive month at an index level of 52.4, while the lowest came from the West at 48.6. The South was at 50.5 and the Northeast stood at 50.6. Firms with an institutional specialization have reached the highest level since just after the pandemic, according to AIA. However, low activity continues for firms with a specialization in multifamily residential and commercial/industrial billing.
“Business is hot and cold. We remain optimistic and busy currently, but have seen other industry forecasts that predict a future decline, so we remain cautious,” said one Southern firm in the release.
The architecture services sector added 1,300 jobs in May, leading to the largest monthly growth since November 2022, AIA said. Overall economic activity was solid in June as the Consumer Price Index (CPI) revealed that consumer prices increased by 0.2% from May to June, and the rate of growth slowed to 3% from one year ago.
An interactive history of the AIA Architecture Billings Index is available on the SMU website.
By Becca Moczygemba, becca@steelmarketupdate.com
Becca Moczygemba
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