Business conditions at architecture firms deteriorated in September, according to the American Institute of Architects (AIA). The AIA/Deltek Architecture Billings Index (ABI) score of 44.8 for the month is the lowest score reported since December 2020 during the height of the pandemic; it indicates the share of firms reporting declining billings has significantly increased. In addition, the value of newly-signed design contracts also slumped in September, indicating that there is increasing reluctance among clients to sign contracts committing to new projects. Although firms continued to report relatively robust backlogs of 6.5 months on average, they have shrunk by nearly a month since their peak of an average of 7.2 months in March 2022.
Declining billings were reported by firms in all regions of the country in September, with firms in the West continuing to report the softest business conditions, as has been the case for the last four months. Conditions also softened further at firms located in the South and Northeast, while billings declined at a slower pace at firms located in the Midwest. By firm specialization, billings were essentially flat at firms with an institutional specialization, while they declined further from August at firms with a commercial/industrial specialization and remained very soft at firms with a multifamily residential specialization, where billings have declined every month since August 2022.
