According to the AIA’s latest Architecture Billings Index (ABI) report, architecture firm billings are in their fourth month of decline. But the decline appears to be slowing. In January, the ABI hit 49.3, up from the 47.5 reported in December 2022. (Any score under 50 indicates a decline in billings.)
“While the downturn in design activity extended to four months in January, there are signs of easing,” said AIA Chief Economist, Kermit Baker in a press release. “In particular, architecture firms reported that new project work has begun to increase, signifying that this decline in billings may reverse in the coming months.”
Firms in every region except for the South reported modest growth in billings, but business conditions remained weak at firms that specialize in only one or a handful of building categories. However, firms that specialized in a mix of projects (where no one building type or category represents more than half of annual billings) reported growth for the third month running.
In January the AIA asked responding firm principals and leaders about their work abroad. Seven percent of respondents said they have billings from an international project, while an additional 13 percent reported they have had international project billings in the last five years. At firms with current and ongoing international work, the average share of gross billings from those projects was 6.7 percent, with only 13 percent of firms reporting that ten percent or more of their billings came from international commissions. Sixteen percent of firms have projects in Central America and the Caribbean, 24 percent have projects in the Middle East and North Africa, 28 percent have projects in East Asia and the Pacific (Korea, Japan, Southeast Asia, Australia, and Oceania are included in this region, but China is not), and almost half of the firms that work internationally (44 percent) are working on projects in Canada.
About 14 percent of firms that bill more than $5 million annually have international billings, while nine percent of firms with an institutional specialization currently have international billings. When divided by region, Southern and Northeastern firms were more likely to have international billings (at eight and nine percent, respectively).
Of surveyed firms not currently working on international projects only four percent would be willing to pursue international work at a later date, while 76 percent of those surveyed have zero plans to work beyond the United States. Just over half (57 percent) of firms in the latter category said they had enough domestic work, or that they didn’t want to deal with potential new obstacles posed by international projects (54 percent).
AN will be back again next month with update on February’s billings performance.
