(05-20-20)
Following last month’s precipitous decline, billings at architecture firms sank even lower in April, as the COVID-19 pandemic continued to have a severe impact on firm business. The ABI score declined to 29.3, a new all-time low for the index (a score below 50 indicates decreasing billings), with more than half of responding firms reporting a further decline in their firm billings from March to April. Inquiries into new work also remained extremely low in April, although modestly fewer firms reported a decline in inquiries than in March. However, immediate prospects for new work remain bleak, as the value of new design contracts also remained extremely low. Regionally, business conditions weakened even further at architecture firms in the Northeast in April, where many areas remained under construction stop orders for the entire month. Those restrictions are slowly being lifted, so firms in that region may see conditions that are not quite as weak in May. Firms located in the West continued to report somewhat less dramatic losses than firms in other regions in April, but overall, billings declined significantly across the country. Billings also weakened substantially at firms of all specializations in March, with firms with a commercial/industrial specialization reporting the largest decline, followed by firms with a multifamily residential specialization. Conditions continued to soften in the broader US economy as well in April. Nonfarm payroll employment suffered its largest one month decline in the history of the data series (collected since 1939), as 20.5 million jobs were lost. The leisure and hospitality sector shed 7.7 million jobs (47% of employees in the sector) while retail employment declined by 2.1 million jobs. The construction sector declined by 975,000 employees, 206,000 of those from the construction of buildings segment. Architecture services employment lags national data by one month, and in March the sector only shed 200 jobs from its most recent peak of 200,000 total positions in February. However, the coming months will likely see more significant declines in employment for the industry. Consumers also reported that they continue to be extremely worried about the economy. The University of Michigan’s Index of Consumer Sentiment declined by 19.4% from March to April, as consumers remained deeply concerned about current conditions. However, the portion of the index that measures consumer sentiment expectations for the coming months did not decline as much, as many consumers still have hope that this will be a short-lived downturn.
