In August, architecture firms continued to face soft business conditions, posting an American Institute of Architects (AIA)/Deltek Architecture Billings Index® (ABI) score of 47.2. Although the share of firms reporting declining billings eased slightly from July, the overall trend remained downward.
Inquiries into new projects showed only modest growth this month, while the value of newly signed design contracts continued to decline. Despite an overall decline in billings, regional performance was mixed in August. Midwest firms reported modest growth for the first time in nearly a year, and billings at Western firms were essentially flat. In contrast, Northeast firms saw billings fall sharply to their lowest level since 2020. Architecture firms are growing less optimistic about future billings, with the share expecting declines rising from 21 percent at the end of the first quarter to 29 percent by the end of the third quarter.
Conditions in the broader economy also remained mixed in August. Architectural services employment increased, adding 700 new positions in July. Despite this employment growth, inflation ticked back up in August, with the Consumer Price Index (CPI) increasing by 0.4 percent from July, after rising just 0.1 percent the previous month. It remains up by 3.4 percent from one year ago, with recent increases in gasoline and energy prices among the largest contributors.
Key ABI highlights for August include:
- Regional averages: Midwest (50.7); West (49.8); South (46.1); Northeast (40.7)
- Sector index breakdown: commercial/industrial (50.4); multifamily residential (47.8); institutional (47.0); mixed practice (firms that do not have at least half of their billings in any one other category) (42.5)
- Project inquiries index: 50.8
- Design contracts index: 48.3