The monthly billing index compiled by the American Institute of Architects may be seen as a cautionary sign that the nation’s construction economy may not be as post-pandemic resilient as previously imagined.
With any score above 50 representing an increase in billings from the month before and a score below 50 representing a decline, the latest index came in at 48.0—a drop of 1.3 points over January’s numbers.
Project inquiries were also off, if marginally so, coming in at 55.0, down from the 55.2 registered in January. Meanwhile, the biggest drop was recorded in the design contracts arena, which showed a healthy 53.4 reading in January, but fell to 51.3 in February.
Regionally, firms in the West produced the most buoyant readings, coming in at 50.4, followed by the Midwest at 48.8; the Northeast at 48.4; and the South, at 47.3.
Although both the commercial/industrial sector and institutional sector saw billings declines in February, good news was seen in the multifamily residential sector, with an increase of 0.3; and the mixed practice sector, up by 1.0 from January to February.
In a statement, Kermit Baker, chief economist for the American Institute of Architects, remarked that the “combination of an unsettled economy and high interest rates is causing investors and property owners to take a closer look at their plans for construction projects.”
Ali Wolf, chief economist with the market research company Zonda, remarked to Architect Magazine that the “slowdown in the broader U.S. economy is uneven depending on sector and geography.” But Wolf also saw good news in the architecture billings index, noting that firms in the West are “outperforming elsewhere in the country.”
By Garry Boulard
