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The Architecture Billings Index continued to flounder in August

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The Architecture Billings Index continued to flounder in August

(Brett Jordan/Unsplash)

After a dour July showing that indicated demand and billings for architectural services were stalling out, the August Architecture Billings Index (ABI) numbers from the AIA weren’t much better.

In July, the ABI, a composite of regional averages, design demand by sector, project inquiries, and existing design contracts, was 40.0; in August, the ABI was exactly the same at 40.0 (anything over 50 is an increase, anything under a decline). That’s a sixth straight month of coronavirus and recession-induced declines that kicked off in March when demand “bottomed out,” and only continued to fall.

However, it’s not all doom and gloom. The project inquiries index, which tracks inquiries into new work, was actually up for the first time since March, at 51.6; in July that figure was 49.1, indicating that developers and homeowners were ready to dip their toes back in the water. Newly signed design contracts declined yet again, but not as steeply, hitting 46.0 in August after having fallen to 41.7 in July.

Regionally, things looked relatively better—meaning they declined again, but not by as much as in July. In the Midwest, design demand moved from 40.1 in July to 41.7 in August; in the South, demand moved similarly from 40.7 to 41.6, and the West fared about the same, moving from 40.9 in July to 41.3 in August. The only region that continues to underperform is the Northeast, as demand fell even further, sliding from 36.8 in July to an even worse 33.9 in August.

By sector, demand has also remained stubbornly low. Multifamily residential project demand, however, was the noted exception, inching upward from 47.5 in July to 49.4 in August. Does that mean those numbers could continue their consistent “rise” and move past 50 in September? Unfortunately, no other typology fared as well; institutional project demand rose from 39.5 in July to 40.2 in August; commercial and industrial demand declined a similar amount as last month, moving from 35.4 in July to 35.5 in August, and firms working on a variety of projects saw demand fall again, from 44.0 in July to 41.9 in August.

“Unfortunately, since the start of the COVID-19 pandemic, many architecture firms are finding fewer inquiries that convert to billable projects,” wrote AIA chief economist, Kermit Baker, Hon. AIA, in the ABI release. “While fewer firms reported declining billings in August than during the early months of the COVID-19 pandemic, the fact that the score has been unchanged for the last three months shows that the recovery from this downturn is not progressing at the pace we had hoped to see.”

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