AIA Iowa: billings index reflects weakness in business conditions

Architecture firms reported a modest decrease in April billings and a slight increase in future project inquiries, according to a report released today from The American Institute of Architects (AIA).

The billings score for March decreased from 50.4 in March to 48.5 in April (any score below 50 indicates a decrease in firm billings). However, firms reported that inquiries into new projects accelerated slightly to 53.9, while most firms continued to report a decline in the value of new design contracts, with a score of 49.8.

“Despite April numbers in the Midwest that show an increase in architectural billings at 51.2 points, design activity across the nation is at a decline, which reflects the growing concern of clients and the current economic outlook,” said AIA Iowa Executive Director Jessica Reinert, in a statement. “The Q1 AIA Iowa market survey reported that most of the work being done in the first quarter was in K-12 education with the most predicted growth in publicly funded projects.”

The report indicates many firms are cautiously optimistic about this year. As the construction market cools, construction costs and schedules are expected to ease, which may make some projects more feasible. In addition, firms will continue to be able to capitalize on opportunities related to green building and energy efficiency initiatives that have increased over the past few years.

Key ABI highlights for April include:

  • Regional averages: Midwest (51.2); West (49.3); South (48.7); Northeast (47.2)
  • Sector index breakdown: mixed practice (firms that do not have at least half of their billings in any one other category) (52.1); commercial/industrial (51.8); institutional (50.6); multi-family residential (41.5)
  • Project inquiries index: 53.9
  • Design contracts index: 49.8

The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score.

Since 1857, the American Institute of Architects has represented the professional interests of America’s architects. AIA Iowa, headquartered in Des Moines, is a statewide affiliate of the national AIA.

An AIA Iowa quarterly construction trends report showed K-12 education initiatives account for 15% of all active projects, and adaptive reuse projects outweigh new construction projects by a ratio of 55/45 in the first quarter.