Business conditions remained soft at architecture firms in November, as the AIA/Deltek Architecture Billings Index remained below 50 with a score of 45.3 for the month (any score below 50 indicates declining billings). The score increased by one point from October, indicating that slightly fewer firms reported a decline in billings in November, but the majority of firms continued to report weak business for the fourth consecutive month, and the seventh month so far this year. However, there are still some encouraging signs of potential work in the pipeline as inquiries bounced back in November after declining in October. And while the value of new signed design contracts continued to decrease in November, fewer firms reported a decline than in October.
Billings also remained weak at firms around the country in November, with firms in all regions reporting a decline for the fourth consecutive month. Business conditions remained softest at firms located in the West, which has been the case since March. And firms of all specializations also reported declining billings, with conditions remaining weakest at firms with a multifamily residential specialization. Billings also continued to decline further at firms with an institutional specialization, which was the strongest sector earlier this year.
In the broader economy, conditions remain largely stable. Industry employment currently stands at 201,200; and while that is 2,500 below the most recent peak in July, it is 2,300 above where it was one year ago.
Inflation continues to moderate as well, with the Consumer Price Index rising by an annual rate of 3.1% in November, well below the latest peak of 9.1% in June 2022, while inflation increased by just 0.1% from October. Energy prices have declined significantly in recent months, with gas prices declining by 6% in November and 5% in October. However, housing costs have continued to increase, with rent rising by 0.5% over the last month.
