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The January 2021 Architecture Billings Index tumbled even further

Down, Down, Down

The January 2021 Architecture Billings Index tumbled even further

Digging deeper (mali maeder/Pexels)

The AIA released its Architecture Billings Index (ABI) figures for January 2021 this morning, and, following straight declines since March of 2020 (not so coincidentally timed with the official move to lock down the United States in light of the coronavirus pandemic), the trend has continued into this year.

The ABI, a monthly national composite of industry health with figures over 50 representing growth from the month before and under 50 representing decline, moved from 42.3 in December of 2020 to 44.9 in January of 2021. (Keen readers will notice that the December number is slightly different from what AN originally reported last year; the AIA’s research department adjusts “seasonal factors” every January to update how the ABI is calculated for recent months.)

There was one spot of good news in an otherwise uniformly negative report: The new projects inquiries index, already up to 52.4 in December, rose again in January to 56.8, indicating that developers and homeowners are certainly thinking about building more. However, the index of newly signed contracts fell again in January from 48.5 to 48.8, so it seems while the intent is there, there’s trepidation about actually dipping toes in the water and signing on to build.

On a region-by-region basis, things didn’t get much better. Design demand in the south moved from 46.8 in December to 47.4 in January; in the West, things continued to get worse as demand dropped from 43.4 to 42.8 in January; the previously strong Midwest fell from 43.6 to 42.2, and the Northeast continued its run as the region hardest hit by COVID as demand moved from 38.8 to 41.9 in January (another consecutive sharp decline).

Breaking design demand down along type also proved disheartening in January. The formerly solid multifamily residential sector dropped again from 46.1 in December to 44.4 in January; mixed-practice firms saw a drop from 48.0 to 47.9; commercial and industrial design demand fell from 47.2 to an even worse 44.3, and institutional demand remains the hardest hit, moving from 38.5 in December to a paltry 39.9 in January.

“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,” wrote AIA Chief Economist Kermit Baker in the ABI announcement. “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.”

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