The leaves are changing colors and the temperature outside is dropping. Fall is officially here, and the holidays will be here before we know it. And, while you may think that the changing of the seasons may lead to less architecture work and construction being done, that does not seem to be the case this year.
The American Institute of Architects reported the September Architecture Billings Index (ABI) was up to 56.6 from August’s score of 55.6. Both the new project inquiries and design contracts for September remained in positive territory, posting scores of 61.8 and 54.7 respectively. AIA Chief Economist, Kermit Baker, Hon. AIA, Ph.D., noted that the ABI scores have continued to increase over the last eight months, marking the highest ever seen in immediate post-recession periods. However, he added, there is concern that revenue increases at architecture firms can sustain this pace. Given that growth in both new design contracts and project inquiries have leveled off in recent months, he expects a similar path for the ABI.
The increase in architecture activity seems to be having a positive effect on construction, as the total construction starts rose 10% in September, according to Dodge Construction Network. All three sectors of construction improved: nonresidential building, residential starts and nonbuilding starts. While most individual sectors also rose, office building starts did fall. Under institutional starts, everything but public buildings increased.
In September’s Associated Builders and Contractors’ Construction Backlog Indicator report, ABC Chief Economist Anirban Basu said, “The good news is that demand for construction services remains elevated. Many projects, whether those in health care, public education or data management, must move forward, and the data indicate that this is disproportionately benefiting larger contractors. For the most part, recent declines in backlog have been registered among smaller construction firms. Low interest rates and abundant liquidity have created the capacity for many investors to deploy substantial capital, and that helps support investment in real estate and construction projects.”
Across the board, the architecture and construction industries appear to be thriving. While there is still a shortage of skilled workers, and supply chain issues that are and will continue to affect all aspects of our lives, there is a lot of positivity. And considering that we’re still dealing with a global pandemic, any positivity is good right now.
