The American Institute of Architects has revealed in its annual Firm Survey Report that U.S. architecture firms are nearing a complete post-Great Recession recovery, boasting billings of $28.4 billion in 2015, just short of its 2008 peak of $28.5 billion.
Renovations accounted for 45% of billings, breaking down to 30% for building additions and 15% for historic preservation. Residential billings rose 30% since 2013 to exceed $7 billion,
- The growth of technology at firms is a major influencer of the growth, said Michele Russo, AIA senior director of research, in a press release. The cloud, virtual reality and 3-D printing contribute to a continued streamlining of construction processes, less waste and fewer delays.
Architectural billings are a traditional leading indicator of future construction activity. And much like the performance of the design industry, the AIA said that construction spending and revenues are also nearing pre-recession levels. Nonresidential construction raked in $450 billion in 2015, approaching its $500-billion peak of 2008. The AIA's bullish take on the construction industry is bolstered by the fact that its Architecture Billings Index (ABI) was largely positive for the first six months of 2016. Despite a wobble in the August ABI, the general increase in activity should result in future construction work. In fact, project inquiries scored 61.8 on August's Index, up from 57.5 in July. Design contracts ranked 52.7 in August, a slight increase from 51.8 in July.
August’s sub-50 ABI performance is only the second time this year the ABI has contracted, but the promising figures for new design contracts and project inquiries bode well for an increase in billings for the rest of the year and for the beginning of 2017. Much of the uncertainty around new construction is tied to the upcoming U.S. presidential election. Last month, the AIA credited a slowdown in design services to clients who were holding off on making any big project commitments until after they could gauge what the next four years might bring.
Construction spending dipped slightly from July to a mark of $1.142 trillion in August. However, spending is up nearly 5% for the first eight months of 2016 compared to a year ago. Industry watchers credit skilled labor and lot shortages as well as costly regulations and the general uncertainty around the upcoming U.S. presidential election for the stall in August spending, which missed analyst expectations, but say the industry is continuing on its path toward full recovery.