Business Conditions Continue to Soften at Architecture Firms
Business conditions at architecture firms continued to soften in October, with the AIA/Deltek Architecture Billings Index (ABI) score declining to 44.3, as more firms reported decreasing firm billings than in September. In addition, indicators of future work in the pipeline stumbled as well, as firms reported a decline in inquiries into new projects for the first time since July 2020, and the value of newly signed design contracts softened for the third consecutive month. These signs mean that not only are billings declining at firms, but that fewer clients are exploring and committing to new projects, which could affect future billings as well.
Billings were universally soft across the entire country in October, with firms located in the West and Northeast continuing to report the softest conditions overall for the second month in a row. The pace of the decline remained slower at firms located in the Midwest and South but marked the third and fourth consecutive month of declines, respectively. By firm specialization, billings declined only modestly at firms with an institutional specialization, but business conditions remained extremely weak at firms with a multifamily residential specialization, and continued to soften significantly at firms with a commercial/industrial specialization.