Architectural Activity Indicator (AbI): Explanation, Analysis
Architecture Billings Index (ABI) Indicates Continued Weakness in Non-Residential Construction Sector
The Architecture Billings Index (ABI) is a valuable economic indicator that provides insight into the demand for non-residential construction activity, including commercial and industrial buildings. For over 20 years, the American Institute of Architects (AIA) has been collecting data from its members through a monthly survey to calculate the ABI.
The ABI offers a nine- to 12-month glimpse into the future of non-residential construction spending activity. A positive ABI score above 50 indicates an increase in architectural billings, generally predicting a growth in non-residential construction activity 9 to 12 months later. Conversely, an ABI score below 50 signals a decrease in billings and forecasts a slowdown or contraction in non-residential construction projects and related economic activity within the following year.
In January 2020, before the pandemic recession, the national ABI for billings was 52, indicating a slight increase in demand for design services. However, by November 2020, the national ABI for billings decreased to 46.3, signalling a decline in architectural billings and a potential slowdown in non-residential construction projects. This trend persisted, with the ABI for billings standing at 46.8 in June 2025.
Similarly, the ABI for design contracts followed a similar pattern. In January 2020, the national ABI for design contracts was 56, but it decreased to 48.6 by November 2020 and stood at 46.0 in June 2025.
The ABI is based on responses to the AIA's Work-on-the-Boards survey, which asks the principals and partners of AIA member-owned architectural firms about their billing activity for the previous month (growth, decline, or flat). The monthly results are seasonally adjusted to allow for comparison to prior months.
The significance of the ABI lies in its role as a forward-looking barometer. Positive scores predict growth and economic expansion from construction, while negative scores indicate contraction and economic slowdown ahead in the construction sector and, by extension, the broader economy. For example, the ABI remaining below 50 for 31 of the last 34 months and multifamily residential billings below 50 for 36 consecutive months suggest ongoing challenges in housing starts and commercial real estate construction.
Companies involved in the design and construction process can use the ABI to aid in tasks such as budgeting, identifying opportunities, resource management, hiring, and payroll management. Financial experts and advisors often consult the ABI in conjunction with other economic indicators like New Home Sales, lumber futures prices, and GDP data to make sense of the overall economic picture.
The ABI affects various businesses, including architecture firms, reprographics companies, and contractors, providing insight into the level of demand for design services from architectural firms, which in turn provides insight into the level of interest in constructing new buildings. Despite the current challenges, the ABI continues to serve as an essential tool for understanding the future of the non-residential construction sector.
[1] ABI Data and Analysis
[2] ABI FAQs
[5] ABI Regional and Sector Data
[1] Incorporating the ABI regional and sector data, finance experts might predict a potential increase in mining projects as the ABI for non-residential construction activity remains below 50, suggesting ongoing economic slowdown in the construction sector.
[5] As the ABI for non-residential construction projects, including commercial and industrial buildings, continues to hover around 46, businesses in the financing sector may need to reassess their mining investment strategies due to the potential future contraction in this segment.
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