Architectural Billings Index improved in February, but still below 50

The Architectural Billings Index, a leading indicator of nonresidential construction activity, in February improved to 49.5 from 46.2 a month earlier. A reading greater than 50 indicates an increase in billings, while a reading of less than 50 indicates a contraction.

It was the 13th straight month with a reading of less than 50, but was the best since July 2023, according to the American Institute of Architects.

“There are indicators this month that business conditions at firms may finally begin to pick up in the coming months. Inquiries into new projects grew at their fastest pace since November, and the value of newly signed design contracts increased at their fastest pace since last summer,” Kermit Baker, chief economist at the group. “Given the moderation of inflation for construction costs and prospects for lower interest rates in the coming months, there are positive signs for future growth.”

Despite weakness in the overall billings index, the AIA noted strength in project inquiries and design contracts – possible indicators of future growth.