Architecture billings remained in positive territory for the sixth-straight month in July, but their growth remains sluggish, according to the AIA's monthly Architecture Billings Index (ABI). July's mark of 51.5 is off June's 52.6, which itself was a decrease from the 10-month high of 53.1 recorded in May. The ABI is a leading economic indicator of construction activity in the U.S. reflecting the nine- to 12-month lead time between architecture billings and construction spending nationally and regionally as well as by project type. A score above 50 represents an improvement in billings from the previous month, while a score under 50 represents a contraction.
"The uncertainty surrounding the presidential election is causing some funding decisions regarding larger construction projects to be delayed or put on hold for the time being,” AIA chief economist Kermit Baker, Hon. AIA, said in a press release. "It’s likely that these concerns will persist up until the election, and therefore we would expect higher levels of volatility in the design and construction sector in the months ahead."
Architecture firms surveyed by the AIA for the index reported a decrease in project inquiries in July, dipping to 57.5 from 58.6 in June. Design contracts, however, rebounded from June's contraction of 49.7 to achieve a mark of 51.8 in July, indicating renewed growth.
The regional markets reported mixed results. The South and Midwest posted modest gains to marks of 56.9 and 50.1, respectively, while the West contracted to 49.2. The Northeast dipped further into negative territory in July with a score of 49.3, its lowest mark in seven months.
Among the sectors, multifamily residential continued to perform the strongest, posting a score of 55.2 in July. Institutional followed at 50.7 for the period, with mixed practice at 50.5, and commercial/industrial at 50.3. Although billings in all four sectors slowed or stayed the same in July, they remained above the break-even mark, indicating growth.