The continued COVID-19 pandemic means more challenges ahead for the construction and architectural industries. The Construction Financial Management Assn. Confindex shows third-quarter survey results were unchanged from the 87 registered in the second quarter, but down more than 24% from the same period a year ago. That said, there is some room for optimism, as nearly 26% of respondents indicated their profitability had already returned to pre-crisis levels, another 19% anticipated their profitability would return to pre-pandemic levels within the year, and 47% projected a full recovery within 1-3 years, noted Anirban Basu, CFMA’s economic advisor in the September report.

While the third quarter also ended on a more promising note for architects, with fewer firms reporting a decline in billings in September, the American Institute of Architects’ Architectural Billing Index (ABI) continues to be below 50.

Architectural woodworkers are also cautious heading into 2021. Despite many negative trends, the Architectural Woodwork Institute’s Cost of Doing Business Survey Business Sentiment Index is at 53%, which is lower than the 65% expressed last year, but still above the 50% mark indicative of an improving environment. 

Faring better are custom cabinet shops, due in part to an increase in home renovations as a byproduct of sheltering in place. A survey of small and medium shops by the Cabinet Makers Assn. and Woodworking Network found 70% expect sales to be the same or better than in 2019, while 30% project a decline.

Click to enlarge the infographic, plus find more market data in the December 2020 FDMC Wood Industry Almanac.

 

Architecture firm billings remain weak, but moving toward recovery

The Architectural Billing Index (ABI) shows Work-on-the Boards. An index score above 50 indicates growth, while below 50 shows a decrease.

The third quarter ended on a more promising note for architecture firms, with fewer firms reporting a decline in billings, according to a report from the American Institute of Architects (AIA). Although September’s ABI score of 47.0 indicates a majority of firms saw a decline in billings, it was an improvement from the 40.0 recorded the previous month. Design contracts rose 2.9 to 48.9, but were still below the 50 threshold. Firms also reported an increase in the number of new project inquiries for the second month in a row. Looking at the sectors, Residential was the strongest, at 54.0, followed by Commercial/Industrial at 43.3 and Institutional at 40.5.

 

Quick Stats

• The Architectural Woodwork Institute’s new ANSI/AWI 0641-2019–Architectural Wood Casework Standard establishes structural and aesthetic tolerances for a variety of architectural wood casework, including wood veneer-faced architectural cabinets, plastic-laminate-clad architectural cabinets, and cabinet and drawer hardware as specified under CSI MasterFormat Division 6. The new standard replaces Section 10 of the AWI Standards, Edition 2 (2014).

• Moderate gains in homeowner spending for improvements and repairs are expected through much of next year as initial concerns of a possible pandemic-induced downturn have largely dissipated, according to October’s Leading Indicator of Remodeling Activity (LIRA) by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual growth in renovation and repair spending of 4.1% by the first quarter of 2021 with gains softening to 1.7% by the third quarter.

• A COVID-19 impact survey by the Architectural Woodwork Manufacturers Association of Canada found a significant slowdown in work projects, with some respondents noting that although open, they have had to suspend projects as well as temporarily lay off some staff.

• Custom cabinetmakers also do a variety of commercial and residential projects. According to the CMA’s Benchmark Survey, residential projects include: kitchen (93%), bathroom (86%), entertainment/home theater (86%), laundry/mud room (86%), closets/dressing room (79%), library (78%), bars (77%), fireplace surround (73%), wine cellars (59%), garages (47%), exterior cabinetry (34%), and exterior millwork (19%).

Market Data Sources: Architectural Woodwork Institute (AWI), The American Institute of Architects (AIA), Architectural Woodwork Manufacturers Association of Canada (AWMAC), Construction Financial Management Assn., Cabinet Makers Assn. (CMA), FDMC magazine, Houzz, LIRA/Joint Center for Housing Studies of Harvard University.

Category: Architectural & Custom: commercial & residential interior millwork, casework, furniture & cabinetry.

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