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Architectural Billings Tumble, With Midwest Trailing All Regions

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After two consecutive months of growth, the American Institute of Architects Architectural Billings Index (ABI) plunged into negative territory in March, reflecting softening demand for design services in U.S. markets.

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The index slipped from 50.7 in February to 48.8 in March. Scores above 50 denote an increase in billings.

“This protracted softening in demand for design services is a bit of a surprise given the overall strength of the market the last year and a half,”  AIA Chief Economist Kermit Baker indicated in a statement. “Hopefully, some of this can be attributed to severe weather conditions over this past winter. We will have a better sense if there is a reason for more serious concern over the next couple of months.”

Baker indicated the March score could denote a “broader soft spot” in U.S. construction than previously anticipated.

The Midwest (46.6) trailed all other regions in March, followed closely by the Northeast (46.8). The South (52.8) and West (50.7) both remained in positive territory, with both regions demonstrating modest growth during the month.

“Business conditions remain weak for firms in the Northeast and Midwest, where firms have reported negative ABI scores for at least five straight months,” said Baker.

By sector, only residential (52.1)  logged positive growth. Industrial slipped a point, from 50.6 to 49.6 between February and March. Institutional (49.0) and mixed-use (47.6) remained largely unchanged for the same period.

As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.


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