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By: Kendall Jones on June 21st, 2017

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Architecture Billings' Growth Continues in May

Industry News | Blog Posts

Demand for design services continues to increase as the Architecture Billings Index (ABI) records a fourth consecutive month of growth. The May ABI score was 53.0 per the latest report from the American Institute of Architects (AIA). This is coming off a score of 50.9 in April. The ABI acts as a barometer for future nonresidential construction work, with the average lead time between architecture billings and construction activity is around nine months to a year. The ABI has been relatively strong the past 12 months with nine months reporting increases in design activity.

The new projects inquiries index and the design contracts index both had their strongest scores of the year. The new project inquiries index was 62.4 in May following a 60.2 in April. The design contracts index, an indicator of future billings, increased from 53.2 in April to 54.8 for May. Both indices have had scores over 50 all year. (For the ABI, all scores above 50 indicate an increase.)

"The latest ABI results continue to support optimism for the building sector," said ConstructConnect's Chief Economist Alex Carrick. "There’s a progression of employment numbers that I like to monitor and which also lends credence to what the AIA is saying."

"May’s U.S. total employment number was +1.6% year over year (y/y). Services jobs were +1.8% y/y. Construction jobs were considerably better at +2.9% y/y. And staffing with ‘architectural and engineering’ firms was best of all, at +3.1% y/y," noted Carrick. "The prospects for future onsite ‘hard hat’ activity are being bolstered by an upfront design community that is staying bullish."

With the exception of the Northeast, billings remained strong in all regions. The South increased from a 55.3 in April to 56.1 in May. The Midwest dipped to 50.4 following a score of 53.3 the previous month but was still in positive territory. The West improved from 50.9 last month to 52.3 for May. The Northeast dropped from 50.7 in April to 46.5.

All sectors had strong results in May. Mixed Practice had the highest score with a 55.8, a nice jump from the 53.4 in April. Commercial/Industrial and Institutional both were 51.2 in May, following scores in April of 52.4 and 52.9, respectively. Multi-Family Residential bounced back again in May with a 51.3 after falling just below 50 last month.