Demand for Design Services Rapidly Accelerates

The American Institute of Architects (AIA) reports that demand for design services in March rose sharply from February.

AIA’s Architecture Billings Index (ABI) score for March was 58.0, up from February’s score of 51.3. Any score above 50 indicates an increase in billings. During March, scoring for both new project inquiries and design contracts expanded, posting scores of 63.9 and 60.5, respectively.

“The spike in firm billings in March may reflect a desire to beat the continued interest rate hikes expected in the coming months,” said AIA chief economist, Kermit Baker, Hon. AIA, PhD. “However, since project backlogs at architecture firms have reached seven months, a new all-time high, it appears that firms are having a difficult time keeping up with this uptick in demand for design services.”

The ABI reports that for March, regional averages were mostly up, with the South leading at 57.2, followed by the Midwest (56.2), the West (54.0). The Northeast was the only region with a decline, clocking in at 46.3.

A sector index breakdown shows increases across the board. Mixed practice led with 58.2. Multi-family residential wasn’t far behind, with 57.2. Commercial/industrial is solidly positive with 55.3 and institutional stayed this side of positive with 50.5.

The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.