- The Architecture Billings Index, a forward-looking indicator that tracks building design work and leads nonresidential construction activity by nine to 12 months, jumped to 53.3 in August, a 4.5% rise from July, according to the American Institute of Architects.
- The score for new project inquiries rose in August to 57.9 from 56.1 the previous month, while the design contracts score dipped to 52.3 from 52.9 in July, according to the release. Any score above 50 indicates growth in the sector.
- Despite the jump, AIA Chief Economist Kermin Baker said to expect a nationwide slowdown beyond the timeframe the index precedes, due to mixed economic conditions across different geographic regions and construction types.
“While a strengthening billings score is encouraging, the flat scoring across regions and sectors is indicative of a nationwide deceleration over the next several months,” said Baker. “A variety of economic storm clouds continue to gather, but since design activity continues to increase, we can expect at least another nine to 12 month runway before building construction activity is negatively affected.”
For example, billings softened for the third consecutive month in August at firms located in the Northeast, and have declined in all but two months this year, according to the report. In the West, fewer firms reported billings growth in August than they have in several months, while the pace of growth also declined slightly at Midwest firms.
Many firms still struggle to find enough employees to meet the amount of work they have coming in, according to the report.
The Dodge Momentum Index, which measures activity in the planning stages for new nonresidential buildings, fell 1.2% in August. AIA said in August 42% of firms consider stalled, delayed, or canceled projects to be at least a somewhat serious issue.
Business conditions held steady at firms located in the South, where they were the strongest overall for the second consecutive month. Specialty firms reported an increase in billings in August, with the strongest performance reported by firms with multifamily residential and institutional expertise, according to the report.