With Steady Decline in Architecture Business Billings, Tariffs Exacerbate Growing Problem

In June of 2019, the Architecture Billings Index reported a negative in design deals as well as new project inquiries, the latter of which reached a decade low. This is concerning news following an earlier report in 2018 that stated a decline aside optimistic gains in job growth. The ABI, a reputable source in tracking economic growth for commercial and industrial developments, further reports that billings remain on the downturn in all regions save the south, which continues to see growth, up 1.9 points compared to the previous month’s growth. 

The news for firms in the New York metro area is far less positive, with the northeast region on a 3.9-point decrease from the previous month’s reporting. Sources report a generous backlog of projects, experts have expressed concern that a surplus may quickly whittle down to a deficit. While multiple causes may contribute to this disturbing trend, many are nodding to the pressures brought on by tariffs on China and other nations as only making the problem worse. 

What’s Going on with the Backlog?

In May, Associated Builders and Contractors Inc’s construction backlog indicator showed a near 9-month backlog of upcoming projects nationwide. That said, ABC’s Chief Economist Anirban Basu also indicated the following: 

  • Rises in the cost of materials and labor were still present. 
  • Declines in infrastructure-related jobs were reported as well, though he indicated this might be the result of a statistical anomaly. 
  • Spending has continued and, he reports, should continue through several more quarters. 

The concern, however, is with the slow in new projects and proposals to add to the backlog, and how many of those new projects are coming to the state of New York. With multiple sources reporting declines since the turn of the year, what appears to be the trend in the national region holds true in the Big Apple and all the boroughs as well.


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