The American Institute of Architects’ (AIA) Architecture Billings Index (ABI) reported a decline in December, closing out 2024 on a low note. Following a brief increase in October, the ABI score dropped to 44.1, indicating a decline in billings. Any score below 50 signifies a decrease in billings.
Despite the decline, the AIA noted that inquiries into new projects continue to rise, albeit at a slower pace. However, the value of newly signed design contracts has decreased.
AIA Chief Economist Kermit Baker commented on the decline, stating, “While there were signs that the design cycle was bottoming out in the fourth quarter, the December reading indicated a step back. There remains considerable uncertainty as to the feasibility of many planned construction projects, so the wait-and-see period is extending into 2025.”
The AIA also reported regional and sector-specific billings indexes. The West region reported a strong score of 52.2, indicating an increase in billings, while other regions reported declines. The Northeast region had the lowest score, at 41.7.
No sector saw significant upward movement in billings. Firms reported the lowest decline in billings from institutional projects.
Concerns over inflation are expected to persist in 2025. The AIA cited the University of Michigan’s Index of Consumer Sentiment, which showed a spike in consumer concern about inflation over the next six months.
