Architecture firm billings recovered slightly in January 2023, compared to December 2022, reports the American Institute of Architects (AIA) in its monthly Architecture Billings Index (ABI). Despite the positive news, architecture firms still reported declining billings for the fourth consecutive month. The ABI is a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.

January’s ABI score of 49.3 is a marginal improvement over December’s ABI score of 47.5 (any score below 50 indicates a decline in billings). Officials from AIA explain that inquiries into new projects and the value of new design contracts strengthened in January, as firms reported an uptick in interest in new projects.

“While the downturn in design activity extended to four months in January, there are signs of easing,” says Kermit Baker, AIA’s chief economist. “In particular, architecture firms reported that new project work has begun to increase, signifying that this decline in billings may reverse in the coming months.”

Regionally, AIA reports most of the weakness is concentrated in the South, which reported a score of 46.9. The three other regions, West (51.3), Midwest (51.6), and Northeast (50.9), reported an increase in billings compared to December.

Additionally, business conditions remain soft at firms of all specializations, according to data provided by AIA. The commercial/industry sector scored 46.8, the institutional sector scored 48.6, and the residential sector scored 45.9.