Pace of demand for design services rapidly accelerates

Demand for design services in March expanded sharply from February according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for March was 58.0, up from a score of 51.3 in February. Any score above 50 indicates an increase in billings. During March, scoring for both new project inquiries and design contracts expanded, posting scores of 63.9 and 60.5, respectively.

“The spike in firm billings in March may reflect a desire to beat the continued interest rate hikes expected in the coming months,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “However, since project backlogs at architecture firms have reached seven months, a new all-time high, it appears that firms are having a difficult time keeping up with this uptick in demand for design services.”

Key ABI highlights for March include:

Regional averages: South (57.2); Midwest (56.2); West (54.0); Northeast (46.3)
Sector index breakdown: mixed practice (58.2); multi-family residential (57.2); commercial/industrial (55.3); institutional (50.5)
The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

The Architectural Billings Index measures the general sentiment of U.S. architecture firms about the health of the construction market by measuring 1) design billings and 2) design contracts. Any score above 50 means that, among the architecture firms surveyed, more firms than not reported seeing increases in design work vs. the previous month.