Business conditions at architecture firms bounced back in May, following a modest downturn in April, according to the May 2023 Architecture Billings Index (ABI). The AIA/Deltek ABI score for the month was 51.0, the highest it has been since last September. In addition, inquiries into new projects and the value of new design contracts also bounced back this month, with inquiries reaching their highest level in nine months, and design contracts increasing for the first time since February. With recent declines in inflation and a pause in interest rate increases, it appears that the economy may be stabilizing.
Despite growth in the overall ABI this month, business conditions remain variable in different regions of the country. Billings improved at firms located in the South for the second consecutive month in May, while they were essentially flat at firms located in the Midwest, following six months of growth. However, billings continued to decline at firms located in both the West and Northeast, where scores have been below 50 since last fall. By firm specialization, business conditions softened further at firms with a multifamily residential specialization in May, falling to the lowest level in two years. Billings also declined for the ninth consecutive month at firms with a commercial/industrial specialization. On the other hand, business conditions improved for the second month in a row at firms with an institutional specialization, as they reported their strongest growth since last year.
