Architecture Billings Index Bounces Back in March

Architectural firms reported an increase in billings for the first time since September 2022, according to the American Institute of Architects (AIA). The organization’s monthly Architecture Billings Index (ABI) shows that March billings increased to 50.4 from February’s reading of 48.0.

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.

However, firms reported that inquiries into new projects grew slower, while the value of new design contracts declined from 51.3 in February to 48.9 in March.

“In spite of the positive movement in architecture firm billings in March, core concerns remain,” says Kermit Baker, AIA’s chief economist. “Inflation still needs to ease further for interest rates to return to normal levels, and the banking turmoil still threatens to hold back residential and commercial construction loans.”

Regionally, all but one region posted a score above 50, the Midwest (51.4). The Northeast scored 49.1, the South scored 47.4 and the West Scored 44.2.

Business conditions remained soft in most sectors, except mixed practice (firms that do not have at least half of their billings in any other category), which scored 53.9. Institutional scored 48.8, commercial/industrial scored 49.7 and multi-family residential scored 44.2.