Demand for Design Services Decreases Considerably

Demand for design services from architecture firms softened considerably in October, according to a new report from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for October was 47.7, the first decline in billings since January 2021 (any score below 50 indicates a decline in firm billings). Inquiries into new projects continued to grow in October with a score of 52.3, while the value of new design contracts declined, with a score of 48.6.

“Economic headwinds have been steadily mounting, and finally led to weakening demand for new projects,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Firm backlogs are healthy and will hopefully provide healthy levels of design activity against fewer new projects entering the pipeline should this weakness persist.” 

Key ABI highlights for October include:

  • Regional averages: Midwest (50.8); South (50.6); Northeast (50.3); West (49.6)
  • Sector index breakdown: institutional (54.3); mixed practice (50.8); multi-family residential (46.1); commercial/industrial (45.9)

Since the regional and sector categories are calculated as three-month moving averages, while the national billings index, design contracts and inquiries are reported as monthly numbers, the regional and sector scores may not always average out to the national score.

Visit AIA’s website for more ABI information.