(08-23-21) Although the torrid pace of billings growth seen earlier this year eased in July, architecture firms are still reporting very strong business conditions overall. The ABI score of 54.6 for the month indicates that the majority of firms are continuing to see their billings increase. Inquiries into new projects and the value of new design contracts remain extremely high as well, with both still near their all-time historic high points from earlier this year. The rate of growth that firms are reporting now is more typical for a post-recession recovery phase, while the exceptionally high numbers seen earlier this year were more of an aberration due to the precipitous nature of the decline in 2020, and the commensurately strong rebound in early 2021. Business conditions remained strong in all regions of the country in July as well, with firms located in the Midwest and West reporting the strongest conditions for the second consecutive month. And more firms in the Northeast reported an increase in billings in July than in June, as conditions continued to strengthen in the region that was experiencing weakness even prior to the pandemic. Firm billings remained particularly robust at firms with a commercial/industrial specialization, but were also strong at firms with institutional and multifamily residential specializations. Recovery remains strong In the broader economy, employment continued its strong recovery in July, with 943,000 new jobs added. In addition, gains in recent months were revised upwards, with 938,000 new jobs now added in June. Architectural services employment added 300 new jobs in June (the most recent data available), with employment in the industry now just 2.0% below its pre-pandemic high. This is a faster recovery than in the total nonfarm payrolls, which remain 3.7% below their pre-pandemic high point. Although inflation remains an area of concern, recent data shows that it may end up being more transitory in nature. While the most recent Consumer Price Index (CPI) data showed that consumer prices rose an additional 0.5% in July, that is nearly half of the increase of 0.9% that was seen in June. This indicates that inflation is moderating somewhat, although there are still concerns on the horizon with rising rents and home prices, as well as higher costs for materials and labor.
Architecture Billings Index (08-23-21)
- Architecture Billings Index, Economic Monthly Summaries
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