Architectural billings increase for first time since pandemic began | Dump Trucks Charlotte NC
Columbus Ohio Dump Truck Company Brief:
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The Architecture Billings Index, seen as an indicator of future construction spending, reached its first positive mark since February 2020, according to a new report from the American Institute of Architects.
February also marked the first time AIA’s design contract score was positive since the pandemic began, with a score of 51.6. The new project inquiries score for February reached a 22-month high, with a score of 61.2.
The growth is encouraging, AIA Chief Economist Kermit Baker told Construction Dive, but added, “We’re not quite ready to pop the champagne cork just yet.”
Dump Trucks Columbus OH Insight:
Baker described the winter months as volatile for billings, which can often make the numbers hard to rely on. After a surprisingly poor performance for December 2020 and January 2021, Baker said the February score is a good start, but only that.
“We’d like to see another month, or at least two months, before we feel confident a recovery is underway for design firms,” he said.
The increase in scores for project inquiries — informal requests for information from potential clients — and design contracts — the number of signed contracts indicating a commitment to a project — could also be a good sign, but should also be taken with a grain of salt, he said.
The index fell by 20.1 points to a score of 33.3 in March 2020, the largest single-month decline in its nearly 25-year history, far surpassing the declines of 9.4 points seen at the start of the 2001 recession and 8.3 points seen at the start of the Great Recession.
The growing number of administered vaccines likely has to do with the increase in billings and confidence, Baker said, as does the pent-up demand for new economic activity. The outlook varies slightly by region of the country, according to AIA’s geographic breakdown:
- South (52.4).
- West (49.5).
- Midwest (49.3).
- Northeast (46.9).
Billings have remained strong in the South throughout the pandemic, Baker said, and have begun to rebound in the West and Midwest. The Northeast has struggled, and Baker said it is not yet clear why.
In terms of sectors, multifamily residential starts stayed strong to begin the pandemic, but have slowed as buyers turn to single family homes — a sector AIA does not track. Commercial/industrial saw billings increase, which AIA did not expect, Baker said, as the sector has struggled throughout the pandemic.
The institutional sector, which includes hospitals and education projects, has been a mixed bag based on a demand for hospitals coupled with some restrictions on schools and campuses. The breakdown for each sector is:
- Mixed practice (52.5).
- Commercial/industrial (50.5).
- Multifamily residential (48.3).
- Institutional (47.8).
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