Vertical Software: Index signals point to stable demand backdrop for design engineering software

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Vertical Software: Index signals point to stable demand backdrop for design engineering software

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Vertical Software

Index signals point to stable demand

backdrop for design engineering software

Industry Overview

Stable construction spend despite mixed macro trends 18 May 2026

While the macro remain mixed, industry demand indicators suggest that construction Equity

activity is stabilizing. On one hand, slowing GDP growth, elevated inflation, and rising oil Americas

prices are increasing project costs and weighing on new investment decisions. On the Vertical Software

other hand, recent monthly improvements in architectural billings and construction Tomer Zilberman

indices suggest that ongoing project activity continues to progress and steady spending Research Analyst

levels help underpin a stable backdrop for design engineering software vendors. BofAS+1 646 855 3203

tomer.zilberman@bofa.com

Backlog supports near-term demand stability

Indicators across the construction lifecycle point to a moderation in new project activity,

but importantly, backlog remains healthy and continues to convert. The Architecture Glossary

Billings Index (ABI) improved from 43.8 in January to 49.8 by March (Exhibit 1), while the • ABI = Architecture Billings Index

Dodge Momentum Index (DMI) rebounded +6.2% Month over Month (MoM) in April after

earlier declines (Exhibit 4). Execution-oriented activity remains solid, supported by US • BIM = Building Information

labor growth (+49k construction jobs in the last four months [Exhibit 6]), reinforcing Modeling

continued software usage across active project workflows.

• CAD = Computer Aided Design

Data centers and public spend supporting growth • CAE = Aided Design Engineering