Economy
Architecture Billings Index Slides to 46.3 in November
Written by Sandy Williams
December 19, 2020
There was no reprieve in November for architecture firms that have seen billings shrink for the past nine months. The American Institute of Architects reports the Architecture Billings Index slid to 46.3 in November, down from October. Although inquiries into new work have risen, albeit at a slower pace, the value of new design contracts has decreased.
The drop in billings was most noticeable in firms located in the Northeast, said AIA. However, Midwest billings rose for the first time since January.
Multi-family residential planning grew modestly in November, but billings continued to decline at firms specializing in commercial/industrial and institutional construction.
When asked about the 2021 outlook for their businesses, 7 percent of architecture firms said it would be a great year, 39 percent said it will be a good year and 25 percent said it would be “so-so.” A quarter of respondents said 2021 will be challenging and 4 percent are fearful of a “potentially disastrous” year for their firm.
Profitability was the primary business-related issue for 2021 as well as operations and continued concerns related to the pandemic.
Pandemic concerns included maintaining productivity while working remotely, retaining key staff and ensuring collaboration among management staff while working from home.
This month, Work-on-the-Boards participants are saying:
- “Our single-family residential work is extremely busy, while our commercial work is nonexistent. Almost all of our staff has been able to transition to the single-family side.”—10-person firm in the Midwest, mixed specialization
- “Business conditions are challenging, but working in our favor is that Minority Business Enterprise (MBE) firms like us are being considered more equally than before.”—8-person firm in the Northeast, institutional specialization
- “Business is still strong here in Tennessee, and I expect 2021 to provide respectable growth for our firm. We are currently looking to hire two new people to accommodate the growth we see coming.”—23-person firm in the South, commercial/industrial specialization
- “2021 looks to be a very challenging year in the Puget Sound region. Public work has been curtailed significantly due to revenue shortfalls, and private development, outside of housing, seems to be waiting for a clear end to the pandemic.”— 55-person firm in the West, institutional specialization
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Sandy Williams
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