Is Architecture Activity Thawing?

2023 was not a great year from a design standpoint. For perspective, the design community cratered during the COVID-19 pandemic, only to rip north in February 2021 and continue with a full head of steam through the fall of 2021. After a minor lull in the winter of 2021, billings rocketed upwards through spring and summer 2022. And then came 2023. It wasn't an entirely bad year, but nine of 12 months of architecture billings shrank, as measured by the American Institute of Architects (AIA) Architectural Billings Index (ABI). The ABI hinges on a handle of 50; values greater than 50 mean architecture billings are increasing, while values less than 50 mean billings are shrinking. There was a lot shrinking in 2023, bottoming out with a 44.3 reading in October. The sub-50 results continued through the new year, which leads us to the present. The ABI for February 2024 came in at 49.5, which is also below the magical 50 threshold. That said, there is a silver lining: the month-over-month results show some green shoots after a dismal 2023. Look at the sharp increase in ABI from January to February below.

2The ABI is a leading indicator, by nine to 10 months, for construction activity. While I have a west coast bias, everyone I talk to is busy, from architects to specialty contractors. While 2023 seems to be a year of contractions, I'm guessing it was a period where the entire architecture/engineering/contractor industry was dealing with the indigestion of the post-COVID craziness. That is my guess as to why the month-over-month results show a 180-degree turn from the year-over-year values displayed below.

I am cautiously optimistic that 2024 will be strong in terms of architecture billings. Predictably given the level of federal funding, the Institutional market looks healthy and everything but the Midwest and Commercial/Industrial markets increased. Perhaps the worm is turning and the market will increase in strength. With the Federal Reserve Bank restating its position on three interest rate decreases in 2024, I suspect that will be a tailwind that will spur building activity. 
Geographic, building type, contract and inquiry details are below.