In its Architecture Billings Index report for the month of September the AIA focused on the good news and the improvements in the broader economy, amid another decline in billings. September’s score of 45.7 is the same as August’s: Any number below 50 indicates a decline in billings from the previous month. September marked the twentieth consecutive month to report a drop in billings.
In his monthly assessment AIA chief economist Kermit Baker again leaned on the positives, referencing the Federal Reserve’s recent cut to interest rates. The AIA pointed out in its summary that the Federal Reserve could slash interest rates two more times before the end of the year.
“Despite recent rate cuts by the Federal Reserve, many clients remain on the sidelines with regard to proceeding on planned projects,” Baker said, “and while new project opportunities also emerge, clients are cautious about which to pursue. Fortunately, architecture firms report backlogs of 6.4 months on average, which remain above pre-pandemic levels and are an indication that there is existing work in the pipeline.”
As Baker referenced in his statement, new project inquiries reported a score of 51.6 in September—a continued glimmer of hope for the industry as the year closes out.
While during the summer it seemed like the Northeast region was having a resurgence, its billings score dipped in August and continued to decline in September, dropping down to 46.4. The region in the country to report the lowest score in September was the West, 42.6, while the highest came out of the South, a promising 49.5.
As has been the trend in recent months, all building sectors are experiencing a decline in billings—no sector has been left unscathed. In September, institutional projects saw the lowest decline in billings, while multifamily residential again reported the steepest decline.
In other positive news, this month the AIA surveyed respondent firms about “reconstruction” work—which it defines as renovations, retrofits, and preservation jobs. The survey found that 39 percent of firms reported that billings for reconstruction projects have increased “over the past few years.” Additionally, the survey results reported that the Northeast and the Midwest are the regions “most likely to report an increase in reconstruction projects.” Perhaps the times are changing.