Unlike Every Other Economic Indicator, Architecture Billings are Still Positive

S&P 500 is down 5% over the past month. Bitcoin is down 33% month-over-month. And in spite of my slightly misleading title, the ​American Institute of Architects (AIA) Architecture Billings Index (ABI) declined 5% from last month, BUT there is a huge caveat: the ABI is still positive which means billings continue to increase. The ABI is a nine-to-12 month leading indicator of commercial construction activity, with values greater than 50 signifying increasing design billings and values less than 50 signifying a decrease. So while the ABI declined from 56.5 in April to 53.5 in May, 53.5 is <checks notes> greater than 50, so billings are increasing. Architects continue to be busy which means builders should remain proportionately as busy for the next year. Here are my hot takes with the full details following:

• All subcategories are above 50, so there is universal strength across the industry. Keep that in minds as you continue to read.
• All regional ABI measures were down except the West. I credit the Golden State Warriors for this positive move #godubs
• All of the market sector ABI measures also declined, no exceptions.
• Project inquiries were UP from last month. While inquiries are far from a sure bet to become actual billings, it is amazing that people are still interested in building in spite of all the economic headwinds.
• For context, all of the May 2022 ABI values are higher than their respective averages starting in January 2012. It is rare that the South is down and perhaps the folks down there are just exhausted.

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