A likely leading indicator of multi-family building trends – the amount of “business-on-the-board” for design professionals – was down sharply in September.
The American Institute of Architects (AIA) surveys its members for its Architecture Billings Index. While aggregate business in the design field throughout all sectors and regions of the country remains steady, designers report that things are starting to get quiet in the residential sector.
AIA Chief Economist Kermit Baker reports “there appears to be emerging weakness in the previously healthy multifamily residential and commercial/industrial sectors, both of which saw a decline in billings for the first time since the post-pandemic recovery began.” Institutional designers, in contrast, are seeing an uptick in demand for their services.
Since architects are typically consulted for services early in the development process, these are likely the first waves being felt of a slowdown in multi-family construction.
Let’s take a quick look at the AIA’s numbers:
Billings by sector
National – aggregate inquiries, contracts, billings all sectors
Business compared to previous month, by region
Revenue outlook for 2023
Despite strong growth in 2022, expectations are down for 2023. 30% of architectural design firms think they will see a decline in business, up from 20% in 2022. The biggest slice of firms, 34%, think they will do about the same (+/- 5%) as in 2022.
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