Demand for design services in August took a markedly downward swing compared to July’s already soft score, according to a new report from the American Institute of Architects (AIA).
AIA’s Architecture Billings Index (ABI) score of 47.2 in August showed a significant drop in architecture firm billings compared to the July score of 50.1. Any score below 50 indicates a decrease in billings. The design contracts score also declined to 47.9 in August, representing a rare dip for this indicator. Billings in the West stayed modestly positive while all other regions remained in negative territory.
“The sizeable drop in both design billings and new project activity, coming on the heels of six months of disappointing growth in billings, suggests that the design expansion that began in mid-2012 is beginning to face headwinds,” says AIA chief economist Kermit Baker. “Currently, the weakness is centered at firms specializing in commercial/industrial facilities as well as those located in the Midwest. However, there are fewer pockets of strength in design activity now, either by building sector or region than there have been in recent years.”
Key ABI highlights for August include:
Regional averages*: West (51.2); Northeast (49.1); South (48.2); Midwest (46.4)
Sector index breakdown: institutional (50.6); multi-family residential (50.5); commercial/industrial (46.9); mixed practice (46.3)
Project inquiries index: 54.5
Design contracts index: 47.9
*The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.