October Architecture Billings Index Reports Slowing Demand for Design Services

The American Institute of Architects (AIA) reports that October’s Architecture Billings Index (ABI) score “softened considerably” following 20 consecutive months of growth.

The ABI score for October is 47.7, which is the first decline in billings since January 2021 (any score below 50 indicates a decline in firm billings). September’s ABI score was 51.7. The AIA says that despite the decline, inquiries into new projects grew in October (52.3), while the value of new design contracts declined to 48.6.

AIA Chief Economist Kermit Baker says that the demand for design services from architecture firms has decreased as economic concerns increased.

“Economic headwinds have been steadily mounting, and finally led to weakening demand for new projects,” says Baker. “Firm backlogs are healthy and will hopefully provide healthy levels of design activity against fewer new projects entering the pipeline should this weakness persist.”

Residential and commercial/industrial projects reported a score of 46.1 and 45.9, respectively. This follows September’s score of 47.9 for residential and 49.6 for commercial/industrial. The institutional sector remained strong in October, reaching a score of 54.3.

Regionally, each sector reported slowing growth. The Midwest scored 50.8; the South scored 50.6; the Northeast scored 50.3, and the West scored 49.6. The West’s region score is down significantly from June when it recorded a score of 57.8.