Architects, along with land planners and civil engineers, are involved in the beginning stages of a project, so they are among the first to feel a recession — and a recovery.
It’s too early to say whether a recovery is at hand. But the downward spiral could be over, some industry experts say.
“It seems we are pulling out of it,” Farmer said. “We’re seeing increasing revenues, and we’re starting to see a little bit of profit.”
What’s more, the American Institute of Architects, after seeing five consecutive monthly declines in activity, reported a sudden upturn of activity in August in its billings index.
The index provides a nine- to 12-month lag time between architecture billings and construction spending, or a glimpse into the future of commercial construction activity.
“Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise,” said Kermit Baker, chief economist of the architects’ trade organization.
“Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle.”
The index is centered on 50, with scores above 50 indicating an aggregate increase in billings and scores below indicating a decline.
In July, the index score was 45.1, the steepest decline in bbillings since February 2010, the trade organization reported. But the index reversed in August, shooting up to 51.4 percent.
Despite the recent upturn, “the extent of the (previous) decline was pretty serious,” Baker said, attributing the low index numbers to nervousness about the U.S. and global economies.
Architectural billings were improving at the end of 2010, showing stability and modest growth in the beginning of 2011, Baker said.
“There was a general sense the economy was improving and then … (the numbers) dropped off the end of the table and turned dramatically.”
Many projects are still on hold, Baker said. “Others are moving slowly and in fits and starts.”
Source: Richmond Times Dispatch