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Architecture Billings Index Mired in a Slowdown

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Following a modest two-month recovery in the level of demand for design services, the Architecture Billings Index (ABI) again turned negative last month. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lead-time between architecture billings and construction spending.

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The American Institute of Architects (AIA) reported the March ABI score was 48.8, down sharply from a mark of 50.7 in February. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.9, up from the reading of 56.8 the previous month. 


The AIA has added a new indicator measuring trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in March was 48.2.


“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,” said AIA Chief Economist Kermit Baker. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”

Key March ABI highlights:

• Regional averages: South (52.8),West (50.7), Northeast (46.8), Midwest (46.6)

• Sector index breakdown: multifamily residential (52.1), commercial / industrial (49.6), institutional (49.0), mixed practice (47.6)

• Project inquiries index: 57.9

• Design contracts index: 48.2

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