ABI Reveals Strong End to 2021

MONDAY, JANUARY 31, 2022


Recently, The American Institute of Architects confirmed in a new report that the Architecture Billing Index ended 2021 on a strong note, having reported a score of 52 for the month of December.

The ABI score for rose one point compared to 51 reported in November (any score above 50 indicates an increase in billings). Despite the positive reading, AIA reported that staff recruitments were becoming a growing concern among firms, among other ongoing issues, such as concerns related to the omicron variant, rising prices and availability of construction materials.

Inquiries into new work and the value of new design contracts both remained strong, however, and backlogs—at an average of 6.5 months—remained near their highest levels since the AIA began tracking this metric in 2010.

“Since demand for design projects has been healthy over the last year, recruiting architectural staff to keep up with project workloads has been a growing concern for firms,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD.

“Architecture is one of the few industries where payrolls have already surpassed their pre-pandemic high, so meeting future staffing needs is a challenge that most firms will need to confront."

Additional highlights about the December report included:

  • Regional averages: South (56.4); Midwest (51.0); West (47.5); Northeast (45.3);
  • Sector index breakdown: mixed practice (60.6); multi-family residential (49.2); commercial/industrial (49.2); institutional (47.6);
  • Project inquiries index: 66.8; and
  • Design contracts index: 55.8.

The report went on to note that the regional and sector categories were calculated as a three-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.

Previous Results

For its tenth consecutive month, the AIA reported that the ABI revealed a continued demand for design services in November.

The ABI score for the month was logged at being 51. While the score had slightly reduced from October’s 54.3, any score above 50 indicates an increase in billings and positive business conditions overall.

During November, scoring for both the new project inquiries and design contracts moderated slightly, but remained in positive territory, posting scores of 59.4 and 55.8, respectively.

Additional highlights about the November report included:

  • Regional averages: Midwest (57.6); South (53.7); West (50.9); Northeast (45.5); and
  • Sector index breakdown: mixed practice (56.9); multi-family residential (51.4); commercial/industrial (50.5); institutional (50.1).

In October, the AIA reported that it’s ABI score for the month fell slightly to 54.3 compared to the 56.6 recorded in September. During October, scoring for both the new project inquiries and design contracts expanded, posting scores of 62.9 and 58.0, respectively.

Other key highlights from the October ABI included:

  • Regional averages: Midwest (61.9); South (58.2); West (53.4); Northeast (48.6); and
  • Sector index breakdown: mixed practice (58.7); commercial/industrial (57.4); multi-family residential (55.8); institutional (51.4).

The previous month, the ABI score increased slightly from 55.6 in August to 56.6. The single-digit increase was witnessed from July to August as well.

Highlights from the September ABI included:

  • Regional averages: Midwest (57.7); South (57.0); West (56.0); Northeast (51.5); and
  • Sector index breakdown: mixed practice (58.8); commercial/industrial (58.1); multi-family residential (56.1); institutional (53.5).

Other key highlights from the August ABI included:

  • Regional averages: West (57.2); Midwest (55.2); South (52.5); Northeast (51.7); and
  • Sector index breakdown: mixed practice (56.0); commercial/industrial (54.7); institutional (54.4); multi-family residential (54.3).

“The surge in design activity continued in August, signifying an expected upturn in construction activity in the fourth quarter and continuing into 2022,” said Baker at the time. “This expected expansion will magnify the already serious problems of price inflation and availability of many construction products and materials, as well as the emerging labor shortages in the industry.”

While the ABI continued to climb throughout the spring and summer of 2021, it wasn’t until February that the report would indicate its first positive mark since before the COVID-19 pandemic. Reportedly a boost from January’s score of 44.9, the report revealed a score of 53.3.

One of the ABI’s lowest points was at the end of March 2020, when it plummeted from the pandemic. That index revealed a 20.1 drop in points to a score of 33.3. The score nearly doubled the decrease of 9.4 points experienced at the beginning of the 2001 recession and the loss of 8.3 points recorded during the Great Recession, making it the index’s largest single month decline in its nearly 25-year history.

   

Tagged categories: American Institute of Architects (AIA); Architects; Architecture; Billings; Color + Design; Commercial / Architectural; Commerial/Architectural; COVID-19; Economy; Good Technical Practice; Market; Market data; NA; North America; Program/Project Management; Project Management

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