Business conditions at architecture firms softened modestly in August, with the AIA/Deltek Architecture Billings Index (ABI) score falling below 50 to 48.1. This marks the 11th consecutive month where billings have been essentially flat at architecture firms, following a period of strong growth in much of 2021 and 2022. There are also signs that the pipeline of future work may be starting to slow. While inquiries into new projects remained relatively strong in August, the value of newly signed design contracts declined for the first time since April, meaning that fewer clients signed contracts for new projects than in the prior three months.
Firm billings declined for the 11th consecutive month at firms located in the West in August, while remaining essentially flat at firms located in the South and Northeast. Most notable, though, was the decline in billings at firms located in the Midwest, which had reported the strongest billings in the country for the last nine months. Business conditions also remained soft at firms with a multifamily residential specialization and declined modestly at firms with an institutional specialization. However, firms with a commercial/industrial specialization reported billings growth for the third month in a row in August.
