(02-20-19)
Despite concerns about the longest government shutdown in history that lingered well into January, architecture firms reported very strong firm billings to start 2019. The AIA’s Architecture Billings Index (ABI) score climbed to 55.3 in January, the highest score in more than two years and substantially higher than the modest growth seen throughout 2018.
Indicators of work in the pipeline, including inquiries into new projects and the value of new design contracts, also strengthened in January. Billings growth was also reported by architecture firms of all specializations in January. Firms in both the South and West regions reported stronger firm billings, following some softness near the end of 2018, while firms in the Northeast reported steady growth for the fifth consecutive month, following a period of declining billings during the first half of 2018. And firms of all specializations also reported improving business conditions in January, although the pace of growth slowed modestly at firms with commercial/industrial and institutional specializations. Effects of the government shutdown were also generally modest across the broader economy in January. On one hand, The Conference Board’s Consumer Confidence Index dropped in both January and December, largely due to a decline in the short-term consumer outlook for income, business, and labor market conditions. While this decline is most likely due to the shutdown, it is not expected to have a lasting negative impact on consumer confidence and does not appear to indicate the start of a broader downturn. On the other hand, nonfarm payroll employment posted very strong gains in January, adding 304,000 new jobs—well over the average monthly increase of 223,000 jobs throughout 2018. In addition, construction employment also had strong gains for the month and architecture services employment ended 2018 on a strong note, climbing to a total of 196,000 positions in December for total 2018 gains of 5,800 new positions.
