Construction Industry Economics Respecting COVID-19 Mixed But Positively Trending

By Maria Roginski posted 10-07-2020 10:39 AM

  

By George M. Nicholos, Esq. of Vandeventer Black LLP

Published September 30, 2020

 

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.

 

George NicholosGeorge Nicholos is an Of Counsel with the business and litigation law firm Vandeventer Black LLP. He focuses his practice on construction law, architectural and construction issues, public contracts, and community associations.  George’s 21 years of experience as a licensed architect includes a full-range of traditional architectural professional services including project management, fee preparation, fee negotiation, field data collection, direction of consultant engineers and coordination, project design, construction estimating, preparation of construction documents, specification writing, shop drawing review and construction administration for both commercial and residential project types. For more information, please contact George at gnicholos@vanblacklaw.com or 757.446.8604.

 

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