Economy
Architecture Billings Index tumbles in May
Written by Brett Linton
June 26, 2024
The Architecture Billings Index (ABI) declined in May to its lowest level in nearly four years, according to the American Institute of Architects (AIA) and Deltek. The Index continues to indicate weak business conditions amongst architecture firms.
The May ABI score of 42.4 marks the 16th consecutive month the index has been in contraction territory. This time last year the index was 49.9, while two years prior it stood at a positive 52.3.
The ABI is a leading economic indicator for nonresidential construction activity, projecting business conditions approximately 9-12 months into the future. Any score above 50 indicates an increase in billings, while a score below 50 indicates a decrease.
“The decline in the May ABI score continues a year and a half of weakness in design billings at US architecture firms,” said AIA chief economist Kermit Baker.
“Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession,” he added.
The project inquiries index eased 2.7 points to 52.1 in May, a seven-month low. The design contracts index fell 3.6 points to 49.2, the lowest measure since July 2020.
All regional indices continued to indicate contraction through May. The Northeastern and Southern region indices saw a slight increase in May, while the Midwestern and Western indices declined. Conditions remained weakest at firms located in the Midwest.
Business condition changes varied by sector in May, though declining conditions remained across the board. The multifamily residential and commercial/industrial sectors experienced growth from April to May, while the institutional and mixed practice sectors declined and remained the weakest areas.
Brett Linton
Read more from Brett LintonLatest in Economy
ISM: Manufacturing growth slows in July, hits 10-month low
US manufacturing activity slowed again in July to a 10-month low
CRU: Pushing EU imports back to 15% would be a big task
Several EU member states have published a ‘non-paper’ that puts forward proposals for a post-safeguard trade measure.
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”