Economy
February ABI Shows Continued Growth for Design Services
Written by David Schollaert
March 28, 2022
Demand for design services from architecture firms in the US rose moderately in February. The gain marked the 13th consecutive month of growth following the pandemic-induced downturn in 2020.
February’s AIA’s Architecture Billings Index registered 51.3, according to the latest report from the American Institute of Architects. The ABI is an advanced economic indicator for nonresidential construction activity with a lead time of 9-12 months. A score above 50 indicates an increase in activity, and a score below 50 indicates a decrease.
Most architecture firms reported steady gains, even if the growth rate has slowed from the explosive pace of mid-2021. They also noted strong readings for both new project inquiries and for the value of new design contracts. That indicates ongoing interest from clients in starting new projects.
But growth has varied significantly by region. Firms in the South and Midwest reported moderate or strong gains. Firms in the Northeast and West, in constrast, saw billings drop. This marks the sixth consecutive month of decreased billings for firms in the Northeast and the third straight for those in the West.
“Ongoing supply chain issues and low inventories continued to be a damper on growth, particularly in the construction sector. … Overall, the outlook for the next six months is still generally optimistic, despite increasing uncertainty going forward,” AIA said.
The index for new project inquiries rose by 1.0 points to 63.0, while the new design contracts index slipped from a reading of 56.1 in January to 55.2 last month.
“Despite the continued healthy demand for design services, activity is plateauing as firms face a myriad of external challenges, from staffing to supply chain disruptions to high inflation and rising interest rates,” AIA chief economist Kermit Baker said. “While the rebound from the pandemic has positively impacted firms in most regions, the prolonged lack of demand for design services in the Northeast is of growing concern.”
Key ABI highlights for January include:
- Regional averages: South (58.6); Midwest (53.2); West (47.9); Northeast (44.3)
- Sector index breakdown: commercial/industrial (55.4); mixed practice (53.8); multi-family residential (52.6); institutional (47.2)
Regional and sector scores are calculated as three-month averages.
Below are three charts showing the history of the AIA Architecture Billings Index, Reginal Business Conditions, and Sectors.
An interactive history of the AIA Architecture Billings Index is available on our website. Please contact us at info@SteelMarketUpdate.com if you need assistance logging into or navigating the website.
By David Schollaert, David@SteelMarketUpdate.com
David Schollaert
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