Architectural Billings Index improves, Business on the Upswing

Association of Construction and Development
March 12, 2014 — 1,750 views  

According to  AIA's Architecture Billings Index (ABI), after a two-month decline at the end of 2013, the architecture firm billings bounced back slightly in January, 2014. The 50.4 score of the month represents modest growth. In the index, a score over 50 is indicative of billings growth. Inquires about new projects are strong.

The weakness present in 2013's fourth quarter persisted in January for the firms situated in the Midwestern and Northeastern parts of the US. This may be in part due to the merciless winter weather. Firms situated in the Western and Southern regions continued to enjoy an increase in billings like they have been for past year and half. It must be said that the rate of growth for the firms in the West has slowed over the past six months.

Firms specializing in residences enjoyed increased firm billings during January. Firms specializing in industrial or commercial architecture exhibited minimal growth, after two months of mild declines. However, the firms that have an institutional specialization went on to experience a softening of business conditions for a fifth consecutive month.  

Climbing at a snail's pace

General economic conditions continued to improve at a comparatively modest pace. The GDP increased by a 3.2 percent annual rate in the last quarter of 2013 and the total growth for 2013 is estimated at 1.9 percent, down from 2.8 percent in 2012. A factor that contributed to growth in the fourth quarter was the increase in local government and state spending. Spending by the federal government, however, decreased during the same period.

Employment rose minimally in January, with about 113,000 positions being added to payrolls. This is below the monthly average growth rate in 2013. Employment in construction increased by 48,000 positions in the first month of 2014, with the impetus from both non-residential and residential construction. Employment in architectural services declined in December.

Staffing up

As per a survey, it is indicated that the gross revenue of firms will increase in 2014 compared to 2013. About 22 percent of the firms that participated in the survey anticipate that there will be a decline in revenue, while the remaining 28 percent expect it to remain constant. However, larger firms are anticipating an increase in revenue in 2014.

Almost 40 percent of architectural firms have planned to add positions with an emphasis on junior positions. A few firms seek to hire designers or senior project managers as partners or principals respectively.

Association of Construction and Development