The AIA's monthly Architecture Billings Index (ABI) came in at a score of 51.3 in June, marking the ninth consecutive month of gains. 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.
June's score is 1.5 points lower than May's reading of 52.8, indicating that the industry is still growing, but at a slower pace than last month.
"Architects continue to see increases in demand for their services this summer, with new project work coming in at a healthy pace," said AIA chief economist Kermit Baker, Hon. AIA, in an AIA press release. "However, business conditions are beginning to vary across the country. While essentially remaining flat in the Northeast and Midwest, billings jumped in the South while dropping in the West."
In June, design contracts posted a score of 54.1—a 0.8-point increase from May's score of 53.3. Design contracts continue to come in above the 50-point threshold—as they have every month over the past year—a sign that momentum is strong, despite small month-to-month fluctuations.
The scores for regional billings—which, unlike the national score, are calculated as a three-month moving average—decreased in three of four regions in June. The billings score for the West fell for the fourth consecutive month to a score of 46.9. While the previous monthly drops showed a slowdown in work, this latest one marks a new contraction in the market. Demand for design services in the Northeast remained relatively unchanged, falling 0.4 points to a score of 50.2 and hovering near the breakeven mark for the third straight month, while demand for design services in the Midwest fell below 50 to a score of 49.8, also hovering near the breakeven point for the third straight month. The South was the lone bright spot, seeing the only month-over-month speed up of demand rising 2.4 points to a score of 57.4.
The individual industry sectors fared better in June. The mixed-use sector continued to see a contraction in demand for design services, although its score clawed its way back toward growth, rising 1.4 points to a score of 49.3. All other sectors posted growth. Demand for design services in the institutional sector slowed, falling 2.7 points to a score of 51.6; and the commercial/industrial sector's score dropped 0.2 points to a score of 53.6. The multifamily residential sector was the only subgroup to experience an increase in design services, rising 2.5 points to a score of 54.6. (Results of sectors are also calculated as a three-month moving average.)