Architectural billings continue to contract in 2021

2021 02 abi architecture billings index february.jpg

 
The Most Recent Report:   February 24, 2021

WASHINGTON – Feb. 24, 2021 – A slight improvement in business conditions has led to fewer architecture firms reporting declining billings, according to a new report today from The American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for January was 44.9* compared to 42.3 in December (any score below 50 indicates a decline in firm billings). Last month’s score indicates overall revenue at U.S architecture firms continued to decline from December to January, however, the pace of decline slowed. Inquiries into new projects during January grew for the second month in a row, with a score of 56.8 compared to 51.7 in December. The value of new design contracts also reflected an easing in the pace of decline, rising to a score of 48.8 in January from 47.0 the previous month.

“The broader economy entered a soft spot during the fourth quarter of last year, and business conditions at design firms have reflected this general slowdown,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “While federal stimulus and the increasing pace of vaccinations may begin to accelerate progress in the coming months, the year has gotten off to a slow start, with architecture firms in all regions of the country and in all specializations reporting continued declines in project billings.”

Key ABI highlights for January include:

  • Regional averages: South (47.4); West (42.8); Midwest (42.2); Northeast (41.9)
  • Sector index breakdown: mixed practice (47.9); multi-family residential (44.4); commercial/industrial (44.3); institutional (39.9)
  • Project inquiries index: 56.8
  • Design contracts index: 48.8

The regional and sector categories are calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers. To learn more about recent economic developments impacting design and construction, visit AIA’s website.

*Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.

 

Interpreting the ABI:

The Architecture Billings Index (ABI) is a leading economic indicator for nonresidential construction activity, with a lead time of approximately 9–12 months. The index is derived from The American Institute of Architects (AIA) Work-on-the-Boards survey, which has gathered data on shifts in billings from architectural firm leaders for over 20 years.

The survey panel asks participating architectural firms whether billings increased, decreased or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.

  • An index score of 50 indicates no change in firm billings versus the previous month.
  • A score above 50 indicates an increase in firm billings versus the previous month.
  • A score below 50 indicates an decrease in firm billings versus the previous month.
  • NOTE: Index numbers cited for the last three reported months are preliminary.
  • The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

 

Source:  The American Institute of Architects (AIA)

National Architecture Billings Index

NATIONAL | amCharts

Source: The American Institute of Architects (AIA)

RELATED: Historical ABI Data 2008 - 2019 »

 

 

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Regional Architecture Billings Index

(Three month rolling average)

ABI REGION 2019 | amCharts

Source: The American Institute of Architects (AIA)

Sector-Specific Architecture Billings Index

Three-month rolling average

Commercial/Industrial
Buildings related to commerce and industry. Office space, banks, retail, factories, etc.

Institutional
Schools, civic/government buildings, museums, hospitals, etc.

Multifamily Residential
Town homes, apartment complexes, condominiums, etc.

Mixed Practice
Buildings that include both residential and commercial/industrial spaces.

ABI by Sector | amCharts

Source: The American Institute of Architects (AIA)

 

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