Architectural design industry making slow recovery: AIA
Demand in the architectural design industry is improving, albeit very slowly. The Architecture Billings Index increased slightly, up to 50.6 in February from 50 in January, according to American Institute of Architects data released Wednesday. The benchmark for the index is 50. Anything above that indicates an increase in architectural billings and anything below indicates a decrease. The AIA surveys a panel of member firms monthly, asking if billings increased, decreased, or stayed the same. The national association then weighs the respondents for the index. Despite increased billings for February, the AIA said the index is not showing the same strength in business conditions as it did in the final quarter of 2010. AIA Chief Economist Kermit Baker said overall demand for design services is treading water. In September, the index moved above 50 for the first time since January 2008. "We’ve been preaching patience and cautious optimism for a full recovery because there continues to be a wide range of business conditions for architecture firms that are also influenced by firm size, practice specialties and regional location," Baker commented. "We still expect the road to recovery to move at a slow, but steady pace." Investment firm Keefe, Bruyette & Woods warned Tuesday that tightening regulation, particularly surrounding Federal Housing Administration loans, could cramp recovery in home building. The new projects inquiry index has remained relatively flat in 2011, according to AIA, hitting 56.4 in February. The regional buildings index was highest in the Midwest at 55.3, followed by the South at 50.1, the West at 49.1, and the Northeast at 46.4. The index was the highest in the commercial/industrial sector (55), followed by the mixed practice sector (51.3), the multifamily residential sector (49.7) and the institutional sector (48.9). Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.