Construction Industry Economics Respecting COVID-19 Mixed But Positively Trending

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The Architecture Billings Index (ABI) is a composite index derived from monthly report surveys from American Institute of Architects (AIA) member firms located throughout the United States reporting on construction project activity the AIA refers to as “Work-on-the-Boards” (projects in the planning and design processes).  The data is compiled by the AIA’s Economics & Research Group, using a first-hand survey index from architectural firms as an economic indicator of nonresidential construction activity.

The data analyzes nonresidential construction activity approximately 9-12 months into the future, considered the typical time frame for a project to mature from design development through to construction. The ABI is viewed as one of the most even-handed barometers of expected construction and economic activity within that forward-looking time frame as the AIA is generally deemed as not having any overt political agenda.

The ABI scores are centered near 50, with scores above 50 indicating an aggregate increase in billings and scores below 50, indicating a decline in billings. The pace of decline during August 2020 remained at about the same level as of June and July 2020, reflecting continued uncertainties associated with the COVID-19 pandemic. Although the August ABI score remained steady at 40, fewer firms reported a decline in billings, indicating an optimistic outlook because firms reported their first increases since February 2020 of inquiries to them for new projects and because the value of new design contracts increased to a score of 46.0.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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