Dive Brief:
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The Architectural Billings Index fell to 48.4 in September, down from August's score of 49.7, the American Institute of Architects reported Wednesday.
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Within the index, the commercial/industrial sector had the highest score of 50.4, followed by mixed-practice at 49.8, institutional at 49.0 and multifamily residential at 48.8.
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September marked the first time since mid-2012 that the ABI saw two consecutive months of declines in demand for services, with the 50 demarcation representing the line between expansion and contraction in demand.
Dive Insight:
The ABI is an indicator of future construction spending — with a lead time of about nine to 12 months — as design services typically lead to new projects.
AIA Chief Economist Kermit Baker said the consecutive months of declines should "act as a warning signal" for the industry. However, he added that uncertainty surrounding the U.S. presidential race, which should ease after the November election, has hindered demand for design services.
However, Baker said, the gradual increase in new work for architecture firms could be interpreted as a sign that the industry will experience a rebound in the next few months.
The slip in last month's ABI echoes the decline in the Dodge Data & Analytics Momentum Index, which fell 4.3% in September due largely to commercial and institutional planning. The upcoming presidential election has been consistently cited as a hindrance to stronger growth in project planning. The AIA noted in its July Consensus Construction Forecast that the election could stifle stronger expansion in the nonresidential construction sector.
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