Source: American Institute of Architects
Firms concerned about rising healthcare, technology costs
Architecture firms reported that their billings were essentially flat to start off 2017. The ABI score of 49.5 for January indicates a very modest decline in firm billings, and is the first monthly decline since September.
With lingering uncertainties about the new federal policies and programs, there may continue to be some fluctuations over the next few months. But the future looks more positive overall, as both inquiries into new projects and the value of new design contracts increased in January, indicating that there is still plenty of new work in the pipeline.
With the exception of firms located in the west, which saw their seventh consecutive month of flat or declining billings after two years of growth, conditions improved at firms in all regions of the country in January. However, firms with a residential specialization also saw softening billings for the second consecutive month in January, after experiencing steady growth for the first 11 months of 2016. On the other hand, business conditions continued to improve at firms with a commercial/industrial specialization, as well as those with an institutional specialization.
The larger economy remained generally strong and stable in January. Architectural services employment climbed to 185,100 in December, the highest it has been since March 2009. Half of the jobs lost in the architectural services sector during the economic downturn have returned.
Anticipated 2017 Cost Increases for Architecture Firms
When asked to identify business-related issues for 2017, the responding firm principals identified managing the costs of running their firm as one of the top concerns. Sixty-five percent of firms surveyed reported managing the cost of running their firm is a major concern, while an additional 31 percent reported that it is a minor concern.
Eighty-three percent indicated they expect healthcare costs to increase over the coming year, while 70 percent said that they expect technology costs to increase, 63 percent that they expect liability insurance costs to increase, and 61 percent that they expect employee benefits (other than health/dental insurance) to increase. Many respondents also noted that rising salaries at their firm are another significant expense, and will continue to be one into 2017.
Read more at American Institute of Architects.