(02-21-18)
Architecture firms started 2018 on a positive note as AIA’s Architecture Billings Index (ABI) score rose to 54.7, its highest January score since 2007. Any score over 50 indicates an increase in billings, and a higher score than in December of 2017 means that billings continues to grow in the new year. Inquiries into new projects also remained strong, as did the share of firms reporting an increase in the value of new signed design contracts—a good indicator of work in the pipeline. Firms have seen consistently strong growth in new project activity for the last 15 months.
Business conditions also remained strong at architecture firms around the country in January, with the exception of those located in the Northeast. Billings softened there in December after a generally strong 2017, and declined further in January. Although ABI data are seasonally adjusted, the decline may be at least partially due to the unseasonably cold weather that gripped much of the Northeast in early January. Billings growth was also strong across the board for firms of all specializations. Conditions remain generally positive in general economy as well, strong enough to make investors nervous about future interest rate hikes and their potential impact on stock prices. Nonfarm payroll employment increased by 200,000 positions in January, while construction employment grew by 36,000 positions, for a total of 226,000 new positions over the last year. Architecture services employment increased by 1,700 in December—the most recent data available—and now stands at a total of 193,200, after adding 9,000 total new positions in 2017, and has recovered to 89 percent of its pre-recession peak of 217,800. Consumer sentiment was also generally high in January, as the University of Michigan’s Survey of Consumers reported that 2017 had the highest yearly average for their Index of Consumer Sentiment since 2000.
