The American Institute of Architects’ (AIA) monthly Work-on-the-Boards survey for May shows a mixed bag of tea leaves for the construction industry writ large.
A leading indicator for projects in the pipeline tells us that nationally, on aggregate across all sectors, business is up slightly.
But the details sorted by region and sector – multi-family residential, industrial/commercial, and institutional—show that the slowdown has not reversed, and is still quite acute in multi-family residential.
In Salt Lake City, the Planning office had its quietest May since 2014, off its usual May average by 19 percent.
Let’s take a look at those local numbers and the breakdown found in AIA’s Architecture Billings Index.
SLC Planning’s May numbers
Contextualizing the recent downturn as an exception in a ten-year pattern of growth, the Salt Lake City Planning Division reports a 28% decrease in applications compared to May last year.
The May average (2013-2022) is 99 applications, and this May that number fell 19 percent, to 80. That’s the lowest traffic for May since 2014, reports Planning.
At this point there’s little question of the trend for 2023 – it’s a race with 2014 to the bottom of this chart.
AIA’s Work-on-the-Boards survey
April and May saw upticks in business, both inquiries and billing, led by the Southern region. The Midwest was “essentially flat,” following six months of growth.
The NE and West continued to slow, a pattern apparent since Fall 2022.
That languor is most intense in multi-family residential design, which reached its lowest level in two years. Yes, inflation has slowed, but interest rates and construction costs are still keeping the lid on new projects. Demand for commercial/industrial design is also slumping—for the ninth consecutive month.
Firms which specialize in institutional design, however, are getting a little busier. For the second consecutive month, institutional design firms report an uptick.
Architects also report job growth in their industry, adding 1,100 new positions in April (the most recent numbers). In May, construction industry employment grew by 25,000 jobs, which mirrored national job growth (390,000) for the month.
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