Architecture Billings Index shows “demand for design services is accelerating” in August

by Risk calculated on 09/21/2022 08:59:00

Note: This index is a leading indicator mainly for new investments in Commercial Real Estate (CRE).

From the AIA: Demand for design services is accelerating

Demand for design services from U.S. architectural firms grew at an accelerating rate in August, according to a new report released today by the American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for August rose to 53.3 compared to 51.0 in July (any score above 50 indicates an increase in billings). In August, the score for new project requests rose to 57.9 from 56.1 the previous month, while the score for design contracts eased slightly to a score of 52.3 from 52.9 in August. July.

“While a strengthening billing score is encouraging, the flat score across regions and sectors indicates a nationwide deceleration over the coming months,” said AIA Chief Economist Kermit. Baker, Hon. AIA, PhD. “A variety of economic storm clouds continue to gather, but as design activity continues to increase, we can expect at least another 9-12 month lead before building construction activity is negatively affected.”

• Regional averages: South (52.9); Midwest (51.4); West (50.2); Northeast (49.8)

• Breakdown of the sector index: multi-family residential (52.0); institutional (52.0); commercial/industrial (51.2); mixed practice (51.2)
added emphasis

Click on the graphic to enlarge the image.

This chart shows the Billings Architecture Index since 1996. The index was 53.3 in August, down from 51.0 in July. Any figure above 50 indicates an expansion in demand for architectural services.

Note: This includes commercial and industrial facilities such as hotels and office buildings, multi-family residences, as well as schools, hospitals and other institutions.

This index has been positive for 19 consecutive months. This index generally precedes investment in CRE by 9 to 12 months, so this index suggests a recovery in investment in CRE until 2023.