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AIA: Architecture billings remain sluggish

Business conditions for U.S. design firms showed little sign of improvement as summer wound down, according to a new report from the American Institute of Architects.

AIA’s Architecture Billings Index, a barometer of future construction starts, came in at 40.0 in August, AIA said Wednesday. Any reading under 50 indicates a decline in billings. The June and July scores were at about the same level.

“Unfortunately, since the start of the COVID-19 pandemic, many architecture firms are finding fewer inquiries that convert to billable projects,” AIA chief economist, Kermit Baker said in a statement. “While fewer firms reported declining billings in August than during the early months of the COVID-19 pandemic, the fact that the score has been unchanged for the last three months shows that the recovery from this downturn is not progressing at the pace we had hoped to see.”

The Midwest had the best regional score (41.7), followed by the South (41.6), West (41.3) and Northeast (33.9). By project type, the breakdown was multifamily residential (49.4), mixed practice (41.9), institutional (40.2) and commercial/industrial (35.5).

A separate report released Monday by the Minnesota Department of Employment and Economic Development and the Federal Reserve Bank of Minneapolis reveals similar concerns among business service providers in Minnesota.

The DEED/Minneapolis Fed survey received 148 responses from companies that include architects and engineers. More than half of the respondents expect a decline in consumer spending and corporate profits in the next four quarters. But the outlook is mixed when it comes to their profits. On that question, 49% of respondents foresee a drop, 34% expect no change and 17% anticipate an increase in profits.

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