Anytime the "lead" in a press release contains: "Beginning its third year of negative conditions..." you know the rest of the information isn't going to be pretty. And true to form, the latest information from the American Institute of Architects (AIA), is pretty ugly.
The Architectural Billing Index (ABI) dropped nearly three points in January to 42.1, from a December reading of 45.4. This rating shows continued decline in demand for design services (any rating below 50 equals contraction, above 50 equals expansion). The ABI is a leading economic indicator, with architectural billings generally preceding construction spending by nine to twelve months.
“Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.
Regional averages showed the Midwest at 48.0, the Northeast at 45.7, the South at 41.32 and the West at 40.5. One bright spot was that the Project Inquiries Index registered a 52.5 reading, indicating a possible light at the end of the tunnel. On the local level, the SF Bay Area firms I've been speaking with confirm they are beginning to see more RFP's, and more serious project inquiries.
The Architectural Billing Index (ABI) dropped nearly three points in January to 42.1, from a December reading of 45.4. This rating shows continued decline in demand for design services (any rating below 50 equals contraction, above 50 equals expansion). The ABI is a leading economic indicator, with architectural billings generally preceding construction spending by nine to twelve months.
“Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA.
Regional averages showed the Midwest at 48.0, the Northeast at 45.7, the South at 41.32 and the West at 40.5. One bright spot was that the Project Inquiries Index registered a 52.5 reading, indicating a possible light at the end of the tunnel. On the local level, the SF Bay Area firms I've been speaking with confirm they are beginning to see more RFP's, and more serious project inquiries.
