Demand for design services at architecture firms decreased in June in comparison to the previous month, according to a new report today from The Ameri
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Demand for design services at architecture firms decreased in June in comparison to the previous month, according to a new report today from The American Institute of Architects (AIA).AIA’s Architecture Billings Index (ABI) score for June was 49.1, which is down from 50.2 in May. Any score below 50 indicates a decrease in billings. Both the project inquiries index and the design contracts index continued to soften in June but remained positive.
“With billings declining or flat for the last five months, it appears that we are settling in for a period of soft demand for design services,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “With the new design contracts score reaching a 10-month low and the project inquiries score hitting a 10-year low, work in the pipeline may start to get worked off, despite current robust backlogs.”
• Regional averages: South (51.9); West (49.3); Midwest (48.9); Northeast (46.1)
• Sector index breakdown: mixed practice (54.3); commercial/industrial (52.3); institutional (47.0); multi-family residential (46.3)emphasis added
Click on graph for larger image.
This graph shows the Architecture Billings Index since 1996. The index was at 49.1 in June, down from 50.2 in May. Anything below 50 indicates contraction 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.
According to the AIA, there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on non-residential construction. This index has been positive for 10 of the previous 12 months, suggesting some further increase in CRE investment in 2019 – but this is the weakest five month stretch since 2012.