AIA: December Architecture Billings Round Out A Strong 2017

The AIA's monthly Architecture Billings Index (ABI) came in at a score of 52.9 in December, indicating that demand for design services continued to grow in the last month of 2017. The ABI is a leading economic indicator of construction activity in the U.S., and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, regionally, and by project type. A score above 50, as seen this month, represents an increase in billings from the previous month, while a score below 50 represents a contraction.

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Healthy demand for design services continued in December, with national billings reaching a score of 52.9. This reading is 2.1 points lower than November's score of 55.0

, which marked the highest demand seen in 2017. New project inquiries—considered to be the most reliable indicator of future billings—increased 0.8 points in December to a score of 61.9, indicating that billings will likely continue to rise in January.

“Overall, 2017 turned out to be a strong year for architecture firms. All but two months saw ABI scores in positive territory,” said AIA chief economist Kermit Baker, Hon. AIA, in a press release. “Additionally, the overall strength of the fourth quarter lays a good foundation for healthy growth in construction activity in 2018.”

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Design contracts remained relatively unchanged in December, with a score of 52.7—a 0.5-point dip from November's score of 53.2. This portion of the index has has fluctuated less than one point for the past four months, but has stayed above the 50-point threshold every month in 2017—a sign that momentum is strong in the market, despite small fluctuations in pace month-to-month.

Regional billings, which, unlike the national score, are calculated as a three-month moving average, increased in two of four regions in December. The Northeast and West were the only regions to post a lower score than a month prior, dropping 0.7 and 0.3 points, respectively, to scores of 49.4 and 53.0. With a score below 50, the Northeast was the only region where design services decreased last month; all other regions posted a score above 50, indicating design services increased in December. Demand for design services increased most in the South (56.3) and Midwest (52.9) regions during December, with scores 1.5 and 1.4 points higher, respectively, than a month prior.

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The mixed-use sector was the sole category of the four building sectors to experience decreased demand for design services in December, with a 1.4-point dip to a score of 50.4. . All sectors posted scores above 50, however, marking the 11th consecutive month of growth. Demand for residential design services was strongest for the second consecutive month, with a score of 54.8—a 1.1-point increase from November's score of 54.3. Demand in the commercial/industrial sector (54.8) and institutional sector (51.2) picked up pace slightly in November, reporting a 1.0- and 0.2-point increase in billings, respectively. (Results of sectors are also calculated as a three-month moving average.)