The Architecture Billings Index (ABI) decreased in February 2023, reports the American Institute of Architects (AIA). February’s reading of 48.0 is a slight drop from January’s score of 49.3, a softening that AIA officials state is a positive sign.

The ABI is a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months. Any score below 50 indicates a decline in billings.

“While overall billings have declined every month since October 2022, the pace of the decline remains relatively modest and has not accelerated dramatically,” say AIA officials. “This could indicate a shorter slowdown at firms, rather than a more dramatic downturn and full-blown recession.”

The decline in architecture firm billings was most acute in the South, which reported a reading of 47.3. The West was the only region to top the 50 mark, posting a score of 50.4, a decrease from January (51.3). The Midwest scored (48.8), a near three-point drop from January (51.6), while the Northeast scored 48.4, a decrease from January’s posting of 50.9.

Business conditions also remained soft at firms of all specializations, according to data provided by AIA. The commercial/industry sector scored 45.8, the institutional sector scored 46.9, and the residential sector scored 46.2. The residential sector was the only specialization to improve in February.

“The combination of an unsettled economy and high-interest rates is causing investors and property owners to take a closer look at their plans for construction projects,” says AIA chief economist Kermit Baker. “While this produces delays for some projects under design, architecture firms report that prospects for future project work remain generally positive.”