Architecture Billings ‘slowdown continues’ in February

To Estimated risk per 22.03.2023 11:09:00

Note. This index is a leading indicator primarily for new commercial real estate investment (CRE).

From AIA: Architectural Billing Index (ABI) slowdown continues in February

More architecture firms reported lower bills in February, indicating a continuation of the recent downturn in design activity, according to a new report published today by the American Institute of Architects (AIA).

The combination of a volatile economy and high interest rates is forcing investors and property owners to take a closer look at their building project plans,” said AIA Chief Economist Kermit Baker, Hon. AIA, candidate of medical sciences. “While this is causing delays in some development projects, architecture firms report that the outlook for future design work remains generally positive.”

• Regional averages: West (50.4); Midwest (48.8); Northeast (48.4); South (47.3)

• Structure of the sectoral index: mixed practice (57.0); institutional (46.9); commercial/industrial (45.8); multi-apartment residential (46.2)
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AIA Architecture Billing Index Click on the graph to enlarge the image.

This graph shows the architectural billing index since 1996. In February, the index was 48.0 compared to 49.3 in January. Anything below 50 indicates a decline in demand for architects.

Note. This includes commercial and industrial facilities such as hotels and office buildings, apartment buildings, as well as schools, hospitals and other institutions.

This index has been positive for 20 consecutive months, but has shown a decline over the past five months. This index typically outperforms CRE investment by 9-12 months, so this index assumes growth in CRE investment in early 2023 but slowing CRE investment in late 2023.

Please note that multi-apartment billing was rejected in August 2022 and has been negative for seven consecutive months.. This suggests that this year we will see a decline in apartment buildings.