Architecture Firm Billings End the Year on a Soft Note
Architecture firms reported ongoing softness in business conditions to close out 2022, as firm billings declined for the third consecutive month in December, according to the Architecture Billings Index. However, the ABI score of 47.5 for the month is a modest improvement over the November score of 46.6, meaning that slightly fewer firms reported a decline in billings this month, a score below 50 indicates declining billings.
While the value of new design contracts also declined for the third month in a row in December, the pace of that decline slowed as well. And inquiries into new projects continued to grow at a modest pace at the majority of architecture firms this month. Firms also continued to report robust project backlogs of 6.7 months, on average. While this is lower than the project backlogs throughout much of 2022, it is still higher than it was one year ago at the end of the fourth quarter of 2021.
Business conditions remained soft across the country in December, as billings declined in all regions for the second consecutive month. Conditions remained softest at firms located in the West and Northeast regions. Billings also declined at firms of all specializations this month, with the weakest conditions reported at firms with a multifamily residential specialization. Even firms with an institutional specialization are now seeing a more significant decline in billings, despite reporting strong growth just four months ago.