Economy

Architecture Billings Index tumbles in May

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

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.