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ABI Continues Growth in March, as Firms Face Supply Chain Issues

Architecture firm billings continued to grow at a moderate pace in February, with an Architecture Billings Index score of 51.3. Any score over 50 indicates billings growth.

This month marks one full year since the recovery began at architecture firms, following the pandemic-induced downturn that started in 2020. While billings growth has slowed from the explosive pace of mid-2021, the majority of firms are still reporting steady growth. In addition, inquiries into new projects and the value of new design contracts both remain strong, indicating ongoing interest from clients in starting new projects.

Northeastern and Western firms fall behind

However, billings growth is not evenly spread around the country. While firms located in the South continued to report very strong growth in February, and firms in the Midwest reported moderate growth, firm billings continued to decline at firms located in the Northeast and West. This marks the sixth consecutive month of decreasing billings at firms in the Northeast, and the third for firms located in the West.

Firms with an institutional specialization also experienced a decline in billings for the third consecutive month in February, while business conditions strengthened further at firms with a commercial/industrial specialization, and continued to increase at a moderate pace at firms with a multifamily residential specialization.

Firms respond to supply chain disruptions

This month, AIA analysts asked architecture firms about the ongoing impact of supply chain disruptions, in terms of higher costs of materials, longer lead times, and/or less availability, and how those issues have affected their recent interactions with both clients and contractors. Overall, nearly eight in 10 firms indicated that supply chain disruptions are having a more serious impact on projects at their firm compared to a year ago, with 41 percent reporting that is a much more serious issue now.

Just 5 percent indicated that supply chain issues are having a less serious impact now, while 16 percent indicated that they are having about the same impact now. Firms located in the West and those with institutional and multifamily residential specializations were most likely to report that the issues are having a higher impact now, while just 74 percent of firms with a commercial/industrial specialization reported the same.

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