The American Institute of Architects (AIA) has published its latest Architecture Billings Index (ABI) report, highlighting the healthy demand for design services on the eve of the COVID-19 pandemic.
Generally speaking, February's ABI numbers paint a rosy picture for the industry. This, of course, is likely to change as the impacts of the pandemic are felt more broadly across the American economy.
"Demand for design services in February increased at a solid pace for the sixth month in a row," an announcement highlighting the figures states, adding that February's ABI score of 53.4 "reflects an increase in design services provided by U.S. architecture firms" over the figures presented in January of 2020.
The memo adds, "During February, both the new project inquiries and design contracts scores moderated slightly but remained in positive territory, posting scores of 56.5 and 52.0 respectively." As the economic impacts of the COVID-19 pandemic continue to take shape, these strong numbers could lend a bit of hope to architecture firms struggling to make it through the economic recession that has manifested in recent weeks, though that is far from guaranteed.
The regional breakdown shows a slight change, as stronger growth was reported in the South and Midwest regions, while the West fell into negative territory for the first time since June of 2019. Anemic design activity has plagued the Northeast region since 2019, those negative numbers continued into February.
In terms of construction sectors, all areas saw positive growth last month, in keeping with the trend from January. “Business conditions at architecture firms have been surprisingly positive so far this year. However, firms were just beginning to feel the impact of the dramatic slowdown caused by COVID-19 as this survey was being conducted in early March,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “The rapid pull-back in activity throughout the economy will obviously be felt in the design and construction sector, and architecture firms will be one of the first to see how these events play out.”
The economic impacts of the COVID-19 pandemic are just starting to take shape and as might be expected, they are quite worrisome for architecture firms across the country. Recently revised economic projections from researchers at the University of California, Los Angeles, for example, indicate that the American economy had already slid into a recession, with the negative economic outlook expected to last at least through mid-year, if not longer.
Initially, economists had projected modest growth in the American economy through 2020, though the likelihood of a recession taking shape even prior to the pandemic was on the rise.
Archinect is working to develop additional editorial coverage of economic issues as more information becomes available.
To help us learn more about the impacts of COVID-19 on architecture firms, fill out our recently published survey that seeks to understand how the virus has affected the work of architecture firms.
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