Architecture Billings Index Bottoms Out to Historic Lows
Date Posted: April 26, 2020
Posted In: COVID-19 UPDATES, News,
From The Architect’s Newspaper: In a somewhat unsurprising turn of events, especially given the special report the AIA released on April 10, the Architecture Billings Index (ABI) for March 2020 is painting a dire portrait of the state of architectural services demand.
Whereas the ABI in February 2020 painted a rosy picture of demand at 53.4 (50 is the baseline and represents no change, higher numbers represent an increase and lower numbers a decrease), March billings came in 33.3. This 20.1 swing is, according to the AIA, the largest downturn ever recorded in the ABI’s 25-year history. Even the 2001 recession only pushed demand down by 9.4 points, while the housing crash in 2008 decreased billings by 8.3 points.
Inquiries into new design contracts didn’t fare much better, falling from 52.0 in February to 27.1 in March.
Also unsurprising were the regional breakdowns; the Northeast was obviously hit the hardest—falling to 38.4—thanks to construction freezes in New York, Boston, and other major cities. The Midwest and South both fell to 44.2, while the Western states saw the lowest drop, with billings only dropping to 45.3.
Industry-wise, contrary to what one would first assume given the dour predictions on the housing market from last month’s HDTS Special Report, residential design demand, falling to 43.3, didn’t actually fare the worst. Institutional projects, typically where firms gravitate towards during times of uncertainty due to their long timescales and stability of their clients, fell to 46.9, while commercial and industrial projects fell to 41.9.