Architecture firms reported a modest decrease in April billings. However, there was a slight increase in inquiries into future project activity according to a report from The American Institute of Architects (AIA).
The billings score for March decreased from 50.4 in March to 48.5 in April (any score below 50 indicates a decrease in firm billings). However, firms reported that inquiries into new projects accelerated slightly to 53.9, while most firms continued to report a decline in the value of new design contracts, with a score of 49.8.
“The ongoing weakness in design activity at architecture firms reflects clients’ concerns regarding the economic outlook,” said AIA Chief Economist Kermit Baker Hon. AIA, Ph.D. “High construction costs, extended project schedules, elevated interest rates, and growing difficulty in obtaining financing are all weighing on the construction market.”
Despite the recent softness in billings, many firms are cautiously optimistic about this year. As the construction market cools, construction costs and schedules are expected to ease, which may make some projects more feasible. In addition, firms will continue to be able to capitalize on opportunities related to green building and energy efficiency initiatives that have increased over the past few years.
Key ABI highlights for April include:
- Regional averages: Midwest (51.2); West (49.3); South (48.7); Northeast (47.2)
- Sector index breakdown: mixed practice (firms that do not have at least half of their billings in any one other category) (52.1); commercial/industrial (51.8); institutional (50.6); multi-family residential (41.5)
- Project inquiries index: 53.9
- Design contracts index: 49.8
The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score.