The American Institute of Architects monthly Architecture Billings Index came in at 47.7, a dramatic 4-point decrease from September's score of 51.7 and the first decline in billings since January 2021. The ABI is a leading economic indicator of construction activity in the U.S. and reflects a nine- to 12-month lead time between architecture billings and construction spending nationally, regionally, and by project type. A score above 50 represents an increase in billings from the previous month, while a score below 50 represents a contraction.

"It appears there is a lot of wait-and-see happening in the U.S. economy today, and the latest report on billings is no exception," says Ali Wolf, the chief economist of ARCHITECT's parent company, Zonda. "A lot of companies are looking at the economic uncertainty today and deciding it may make sense to put their project on hold until there is a bit more clarity.”

The scores for project inquiries and design contracts, however, were mixed in October. New project inquiries came in at 52.3, falling 1.3 points from September's score of 53.6. Design contracts posted a score of 48.6, falling 2.1 points from September's score of 50.7.

“Economic headwinds have been steadily mounting, and finally led to weakening demand for new projects,” said AIA chief economist, Kermit Baker, Hon. AIA, in a press release from the organization. “Firm backlogs are healthy and will hopefully provide healthy levels of design activity against fewer new projects entering the pipeline should this weakness persist.”

The month-to-month changes in scores for regional billings—which, unlike the national score, are calculated as three-month moving averages—fell in October. All four scores lost ground, but three out of four scores remained above 50.0. Billings in the Midwest dropped 1.3 points to a score of 50.8, while billings in the West declined 2.0 points to a score of 49.6. Billings in the South decreased 1.1 points to a score of 50.6, and billings in the Northeast fell 4.3 points to a score of 50.3.

Two of October's sector billings scores remained above 50.0 and two scores increased slightly. The commercial/industrial sector fell 3.7 points to a score of 45.9; the institutional sector dropped 4.6 points to a score of 54.3. The multifamily residential score fell 1.8 points to a score of 46.1, and the mixed practice sector increased 0.5 point to a score of 50.8. Like the regional billings scores, sector billings scores are also calculated as three-month moving averages.

Read more business news: Moderated September billings reflect pressures in housing market