Architectural billings index falls but inquiries for new projects rising
Billings declined for the fourth straight month at U.S. architecture firms, as measured by the American Institute of Architects. The group's architecture billings index of domestic construction activity reflects the approximate nine- to 12-month lag between billings and construction spending. The June ABI score of 46.3 was almost a full point below the 47.2 recorded in May. The score reflects a continued decrease in demand for design services. A score above 50 indicates an increase in billings. On the positive side, the new projects inquiry index was 58.1, up sharply from 52.6 in May. "While a modest turnaround appeared to be on the way earlier in the year, the overall concern about both domestic and global economies is seeping into design and construction industry and adding yet another element that is preventing recovery," said AIA Chief Economist Kermit Baker. In addition, the stalled debt ceiling talks have led to higher borrowing rates for real estate projects, he said. "Should there actually be a default, we are likely looking at a catastrophic situation for a sector that accounts for more than 10% of overall GDP," according to Baker. The June billings index was highest in the West at 51.7 and lowest in the Midwest at 44.6. Mixed practice had the most traction in June with an index rating of 51.5. The index for multifamily residential was 49.6. Institutional billings were lowest last month at 45.9, as state budget shortfalls affected the sector. The Architecture Billings Index is produced by the AIA Economics & Market Research Group. Information is derived from a monthly “work-on-the-boards” survey sent to a panel of AIA member-owned firms. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.