Billings at architecture firms plummeted in March as the Architecture Billings Index, compiled by the American Institute of Architects, fell by 20.1 points to a score of 33.3 for the month―a score over 50 indicates increasing billings, a score below 50 indicates declining billings. This is by far the largest single month decline the index has seen in its nearly 25-year history, far surpassing the declines of 9.4 points seen at the start of the 2001 recession and 8.3 points seen at the start of the Great Recession, say AIA officials. It reflects just how quickly and fundamentally business conditions have changed across the country and around the world in the last month as a result of the COVID-19 pandemic.
In addition, indicators of future work also declined at a staggering rate in March as uncertainty abounds. It remains difficult to know how long the essentially complete shutdown of the economy will last. Inquiries into new projects fell particularly low, and while the value of new design contracts signed for the month did not fall quite as far as some projects that were in the works continued to move forward, that score was also extremely low. Firms also reported a sharp decline in their backlogs, from a near record high of 6.3 months at the start of the year to an average of 5.0 months at the end of the first quarter. Fifty-nine percent of firms reported that their backlogs declined in that period, with a third indicating that they had fallen by 10 percent or more. Just 10 percent of firms reported that backlogs increased in the first quarter, while the remaining 31 percent said that they were generally unchanged.
Billings also declined across all regions of the country and all firm specializations in March, although the declines were more slightly modest than at the national level at this time, since these figures are reported as three-month moving averages. Conditions softened the most at firms located in the Northeast, likely due in large part to the nearly complete shuttering of New York City, as well as the construction stop order in Boston. Firms with a commercial/industrial specialization also reported the softest conditions so far, with so much uncertainty over what the future holds for the hospitality and retail sectors in particular. Billings declined the least at firms with an institutional specialization as some of those firms reported actually seeing a modest uptick in work due to increased demand for healthcare facilities. And some firms reported that school projects are actually getting underway early now that many schools are shuttered for the rest of the academic year.
