The Architecture Billings Index (ABI) saw a modest increase in October, marking the first positive score after 20 months of decline, as reported by the American Institute of Architects (AIA) and software provider Deltek on November 20.
The ABI, which predicts nonresidential construction activity 9 to 12 months ahead, rose to 50.3 in October. A score above 50 indicates an increase in billings from the previous month, while a score below 50 reflects a decline.
“Billings have finally stabilized this month, and firms are feeling more optimistic about revenue projections for 2025,” said Kermit Baker, AIA’s chief economist, in a statement.
For 2024, 41% of AIA-surveyed firms expect their net revenue to increase compared to last year, with an average projected growth of 0.4%. However, 36% of firms anticipate a decrease in revenue. Looking ahead to 2025, more firms are optimistic. Those projecting growth for next year expect a stronger increase, averaging 1%. These firms cite falling interest rates, a more favorable lending environment, and strong backlogs and new project inquiries as key factors. Only 26% of firms expect a revenue decline for 2025, according to the survey.
“Overall, 41% of firm leaders anticipate net revenue growth from 2024 to 2025, with 32% expecting growth between 5% and 9%,” Baker added.
Regionally, the South was the only region to report a positive billings score in October, at 52.1. The West and Midwest showed improvements from September, rising to 47.6 and 46.9, respectively, while the Northeast saw a slight dip to 45.6.
In terms of sectors, firms focused on institutional work had the highest billings score at 50.5. Billings for firms specializing in commercial/industrial work and multifamily residential also improved from September, but remained weak, with scores of 47.0 and 45.6, respectively.
Reference
Leggate J. (2024) Architecture Billings Index Turns Positive After 20 Months of Decline. Engineering News Record. November 20.