A new report today from the American Institute of Architects (AIA) reveals the immediate impact of the COVID-19 pandemic on architecture firms in the U.S.
A recent AIA survey found that 50 percent of architecture firms reported fewer new design projects for March—as of the March 23 survey date—as compared to their expectations entering the month. In terms of work on active projects, the overwhelming majority of architecture firms (83 percent) are anticipating a decline in revenue for March relative to their expectations heading into the month, with over a third of firms estimating that their revenue will be at least 10 percent below expectations. This situation is anticipated to worsen in April, with 94 percent of firms expecting revenue declines, and over half of firms (57 percent) anticipating that the revenue falloff will exceed 10 percent.
“Like most other businesses, U.S. architecture firms are heading into uncharted waters regarding what the economy holds in store for them as the COVID-19 pandemic plays out globally.,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Different businesses are feeling the impact of the slowdown differently.”
Beyond billing activity, just under half of firms (48 percent) indicated that all, or almost all, of their staff are now working remotely, while 31 percent reported that some of their staff are working remotely. Few firms reported a major impact to their staff due to family/personal reasons, but 15 percent of firms said that at least some of their staff are currently unable to work at all.
Most architecture firms have limited in-person interactions for the time being
Responding firms were also asked about conditions that they were seeing at their office as a result of the COVID-19 outbreak, and those responses fell into three broad categories: changes to staff working conditions, changes to office operations, and changes to staff travel. Just under half of firms (48%) indicated that all, or almost all, of their staff are now working remotely, while 31% reported that some of their staff are working remotely. Few firms reported a major impact to their staff due to family/personal reasons, but 15% of firms said that at least some of their staff are currently unable to work at all. (Figure 4)
Firm revenue declines due to COVID-19 expected to accelerate in coming months
Finally, responding firms were asked to estimate how much of a loss in revenue they expect to experience in March and April due to issues related to the COVID-19 outbreak. On average, firms estimated a 10% loss in revenue in March, increasing to a 15% loss in revenue in April, with many respondents commenting that they anticipate conditions may continue to worsen in the subsequent months as well. (Figure 5) And while nearly one fifth of respondents (17%) expect no revenue loss in March due to the COVID-19 outbreak, the share of respondents expecting revenue losses of 25% or more nearly doubles from March to April, increasing from 13% to 25%.
