Design-Demand-Plateau Continues, Architecture Billings Index Shows

August 23rd, 2019 by Editor

Even though the industry is beginning to recognize through recent studies the importance of design to increase product sales, demand for design services seems to be lagging according to a new report released recently from The American Institute of Architects (AIA).

The AIA’s July Architecture Billings Index (ABI) score remained essentially flat (50.1) in comparison to the previous month (49.1). This design score is still in positive territory with any score above 50 indicating an increase in billings. However, the design contracts score was in the negatives this month for the first time in almost a year. All regions except the West and firms of all specializations except multifamily residential saw softened July billings.

“The data is not the same as what we saw leading up to the last economic downturn but the continued, slowing across the board will undoubtedly impact architecture firms and the broader construction industry in the coming months,” said AIA chief economist Kermit Baker.“A growing number of architecture firms are reporting that the ongoing volatility in the trade situation, the stock market, and interest rates are causing some of their clients to proceed more cautiously on current projects.”

Looking at the regional averages, the Midwest (48.9), South (48.3) and Northeast (48.3) were in dangerous territory but the West (51.2) was slightly up. In the sector area multi-family residential (50.6) just barely made a positive score while institutional (49.8), commercial/industrial (49.2), mixed practice (48.9) were all low. Project inquires reached 54.9 and design contracts 49.

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