Architectural Billings Crater
I just read my last post from September about how the AIA Architecture Billing Index (ABI) tumbled. How cute was that? The score dropped from 50.1 in July to 47.2 in August and remained below 50 by settling in at 49.7 in September. (For background, any value greater than 50 means that architecture billings are increasing; conversely, any value less than 50 means billings are decreasing. The ABI is a leading indicator of commercial building construction by approximately nine to 12 months.) The scores zoomed back above 50, peaking at 53.4 for February. Wow, that was crazy!
Well, it seemed crazy until this month. Before continuing, you may want to pour yourself a stiff drink.
The ABI for March fell 20.1 points to 33.3. This is the largest drop in the index's 25 year history. For reference, the largest previous drops during the 2001 and 2008-2009 recessions were 9.4 and 8.3 respectively.
The regional breakdown for March 2020:
The Sector Averages for February 2020 are as follows:
The need for buildings, especially housing, didn't just dry up overnight. However, given the overall health of the economy and the deep uncertainty as to the depths of the COVID-19 fallout, it will take several months for these bruises to heal, if not much longer.