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    Home » Trends » Architectural Billings Down for 18th Straight Month
    Trends

    Architectural Billings Down for 18th Straight Month

    BEX StaffBy BEX StaffAugust 23, 2024No Comments3 Mins Read
    Credit: AZ Big Media
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    By American Institute of Architects

    While the ABI/Deltek Architecture Billings Index score of 48.2 for the month indicates that fewer firms reported a decline in billings in July than in May, it still means that more than half of responding firms this month are still experiencing soft business conditions.

    As far as future work in the pipeline at firms, the value of newly signed design contracts decreased for the fourth consecutive month in July, but the pace of that decline slowed as well. In addition, inquiries into new projects continued to increase this month, although that growth continued at the same slow pace they have been growing at for much of the year so far.

    Regionally, architecture firm billings were flat for the second consecutive month at firms located in the Northeast in July, marking the first two-month period with a score at or above 50 for the region since mid-2022. Billings declined at firms in all other regions this month, but the pace of the decline slowed in all of them. Business conditions also remained soft at firms of all specializations in July, although there were some notably encouraging signs at firms with an institutional specialization, where billings were nearly flat.

    Many Firms Experiencing Lengthier Design Times

    This month we asked firm leaders about how the length of time for design services has changed at their firm over the past several years. Overall, nearly half of responding firm leaders (43%) indicated that the length of time for design activities has increased in recent years, with 20% saying that it has increased a lot.

    Nearly one-quarter of firm leaders (23%) said that the length of time for design activities has decreased, while the remaining 34% said that it has stayed about the same. Firms with a multifamily residential specialization were much more likely to report that the length of time for design activities has increased (56%) than firms with institutional (36%) or commercial/industrial (41%) specializations.

    At firms where design time for typical projects has increased in recent years, 54% rated difficulties with permitting, zoning, environmental restrictions, community opposition, etc. as a very important reason for that increase.

    On the other hand, most firm leaders said that larger recent projects (56%), delays caused by staffing shortages on the design side (55%), and delays caused by construction materials availability issues (46%) were not very important factors in increased design time. Overall, 28% of firms indicated that difficulties with permitting, zoning, environmental restrictions, community opposition, etc. were the most significant issue in increased design time, followed by 20% who selected delays caused by client difficulties in obtaining project financing as the one most significant issue.

    At firms where design time for typical projects has decreased in recent years, more than two-thirds of responding firm leaders (68%) indicated that greater urgency by clients in getting design completed was a very important factor in the decrease in design time. (Source)

    ABI/Deltek Architecture Billings Index AIA Architectural Billings Index architectural pipeline commercial/industrial community opposition environmental restrictions institutional labor shortage multifamily residential new project inquiries NIMBY permitting challenges project financing staffing shortage supply chain challenges trends zoning challenges
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