Architecture Billings Index Takes Turn for the Worse

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After showing signs of stabilization over the last three months, the Architecture Billings Index (ABI) plunged nearly five points in June. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the June ABI rating was 37.7, far lower than the 42.9 the previous month. This score indicates a sharp decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 53.8, the fourth straight month with a score in the mid-50s.

“It appears as though we may have not yet reached the bottom of this construction downturn,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Architecture firms are struggling and concerned that construction market conditions will not even improve as soon as next year. There has also been little movement in terms of stimulus funding allocated for design projects having the desired impact of leading to new work.”

Key June ABI highlights:

  • Regional averages: Northeast (42.8), South (40.5), West (39.9), Midwest (36.2)
  • Sector index breakdown: mixed practice (43.5), commercial/industrial (39.5), institutional (37.0)
  • Project inquiries index: 53.8

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