Architectural Firms’ Billings Start to Rise: AIA

Image by Michael Gaida via Pixabay.com

The American Institute of Architects’ monthly Architecture Billings Index in February reached its first positive mark since February 2020, indicating a potential turnaround for the profession.

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The increase followed a bump of nearly three points in January, indicating that positive momentum could be building. The ABI score surged to 53.3 in February, from 44.9 in January; AIA explained that any score above 50 indicates an increase in billings.

In addition, the design contract score rose back into positive territory in February, for the first time since the pandemic began, and the new project inquiries score hit a 22-month high.

“Hopefully, this is the start of a more sustained recovery. It is possible that scores will continue to bounce above and below 50 for the next few months, as recoveries often move in fits and starts,” AIA’s chief economist, Kermit Baker, Ph.D., said in a prepared statement.

He added that architecture employment has now regained nearly half of the jobs lost since the start of the pandemic.

By sector, the Architecture Billings Index broke down as: mixed practice (52.5), commercial/industrial (50.5), multifamily residential (48.3) and institutional (47.8).

Regionally, the ABI was: South (52.4), West (49.5), Midwest (49.3) and Northeast (46.9).

CRE implications

Baker told Commercial Property Executive that architectural firms specializing in commercial and industrial projects have been among those hardest hit by the pandemic, but have now reported “a very modest improvement in their business conditions this month, as industrial activity remains strong, and some restaurants and stores began to reopen.”

Kermit Baker, Chief Economist, American Institute of Architects. Image courtesy of American Institute of Architects

He added that “the pace of the decline in billings slowed at both multifamily residential and institutional firms.”

The Architecture Billings Index is an economic indicator for nonresidential construction activity, with a lead time of about 9 to 12 months. Investment groups, media outlets, architectural firms of all sizes and others rely on this economic indicator to assess business conditions and predict and track the market.

The index is derived from AIA’s Work-on-the-Boards survey, which has gathered data on changes in billings from architectural firm leaders for more than 20 years.

The national index, design contracts and inquiries are monthly numbers; the regional and sector categories are calculated as three-month moving averages.

Read the full report on AIA’s website.