Architecture firm billings continued to decline in February, according to the latest monthly index from the American Institute of Architects/Deltek. But the report’s authors see potential benefits in the index, released on March 20.
They note that the drop in turnover is the smallest since July 2023, which the authors say “suggests that the recent slowdown may be reversing”.
The latest monthly AIA/Deltek index, for February, shows a turnover score of 49.5, compared to 46.2 in January and 45.4 in December. The report also says the design contracts score is 51.1, up from 49.7 the previous month.
Kermit Baker, chief economist at AIA, said in a statement: “There are indicators this month that business conditions may finally begin to pick up in the coming months.”
Baker added: “Inquiries for new projects grew at their fastest pace since November and the value of newly signed design contracts rose at their fastest pace since last summer.”
He said: “Given the moderation in construction cost inflation and the outlook for lower interest rates in the coming months, there are positive signs for future growth.”
Regarding the market sectors, companies concentrated in institutional projects registered an increase in business, with a score of 50.7; those in the commercial/industrial segment had a score of 46.1; and companies in the residential sector recorded the lowest score, with 44.9.
Scores reflect the period from February 2023 to February 2024.
A look at the regional results shows that Midwestern companies posted a modest year-over-year gain, with a February 2024 score of 50.8.
The report says Midwest businesses reported increased business in the past three months and in four of the past five months.
A score above 50 represents an increase in turnover; a score below 50 indicates a decline in business and a score of 50 means no change.
According to the report, the index is considered a leading economic indicator, providing an early signal of nonresidential construction activity in the next nine to 12 months.
