Architecture Billings Continue to Increase

The American Institute of Architects (AIA) released the October Architecture Billings Index (ABI) last week and the value for last month came in at 54.3. This is lower than September's 56.6 and represents the first decline in the rate of billing increases since July 2021, yet to be clear, billings are still increasing. A value greater than 50 means that architecture billings are increasing; conversely, any value less than 50 means billings are decreasing. The ABI is a nine-to-12 month leading indicator of commercial construction activity.

The database I have constructed contains ABI data going back to January 2012 (118 months). The 118-month average ABI is 50.9, so October's 54.3 is a historically healthy measure.

In terms of ABI subset data, there was one sub-50 category last month versus seven 50+ measures. The geographical breakdown is as follows:

• Northeast: 48.6 (the sole decliner previously mentioned, down  from 51.5 in September)
• South: 58.2 (up from 57 in the previous month)
• Midwest: 61.9 (up strongly over September's 57.7)
• West: 53.4 (a decline from last month's 56 but still demonstrating a growth in billings)

A few notes on the regional data. First, the 118-month average for the Northeast is 48.5, so October's 48.6 is basically par for the course. Second, the Midwest's October figure of 61.9 is strong on its own, but when you compare it to the 118-month average of 50.9, it looks spectacular.
 

For the sector breakdown, all were above 50, with Mixed Practice leading the way.

• Multi-family Residential: 55.8 (up from 556.1 in September)
• Commercial/Industrial: 57.4 (down from 58.1 last month but still very strong)
• Mixed Practice: 58.7 (down fractionally from 58.8 in September but still strong)
• Institutional: 51.4 (down from 53.5 in the previous month)

For more color, consider that October's 57.4 for Commercial/Industrial is way above the 118-month average of 50.8. Mixed Practice is seeing similar results with an October ABI of 58.7 clocking in way above the 118-month average of 50.9.

Project inquiries were up in October, increasing to 62.9 over September's 61.8, showing strong interest in design services.
Overall, the ABI numbers are slightly lower on balance than last month with a few localized exceptions. That said, the numbers are pretty robust and demonstrate demand for design services which should translate to continued demand for construction services.