Dive Brief:
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After soaring to an eight-year high in June, the index that measures architectural billings dipped slightly in July but remained in positive territory, the American Institute of Architects reported on Wednesday.
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With a score of 54.7, the Architectural Billings Index “is reflecting healthy and sustained demand for design services” for most kinds of nonresidential projects, the AIA said in a press release. Despite a one-point drop from the month before, the score still reflects an increase in design services, as any score higher than 50 does.
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The index is an economic indicator of construction activity and reflects the nine- to 12-month lead time between architectural billings and construction spending.
Dive Insight:
It’s likely that the slight decrease in the July number does not indicate a dropping off of paying projects on drafting tables, but rather an inability for the field to keep up with “a flurry of design activity in recent months,” suggested AIA Chief Economist Kermit Baker.
Adding to their workload, Baker said, “some architects are reporting a break in the logjam created by clients’ placing projects on hold for indefinite periods, which bodes well for business conditions in the months ahead,” he said.
Baker said some designers are worried that the overall trend of rising building material costs could stunt the ability of governments to pay for large-scale construction, and that could trigger a slowdown for architects. June’s hefty billings report was due, in large part, to a surge in demand for government-funded schools, hospitals and public safety facilities.
