Showing posts from category: unemployed architects
Remember last summer when architect Will Alsop announced that he was getting out of the architecture business to concentrate on his painting? As quickly as that was announced, shortly thereafter it came out that, no, he was getting into becoming a professor. Finally, just a month or so later, he decided that he was going to stick with architecture after all and would be joining the international firm RMJM. Unfortunately, it’s looking like it may have been a better move to stick with his original painting and retirement plans as now RMJM is in something of a tumultuous flux, with not just layoffs, but staffers exiting en masse from several offices and at least twenty principals and senior staff have left as well. Specifically worse is that the firm has admitted that, after a year of employment, none of Alsop’s big projects have been picked up yet, something they undoubtedly must not have expected and which certainly isn’t helping the situation at a company “struggling to pay its bills” according to the Independent. Will Alsop stick it through and will RMJM, one of the largest firms in the world, make it through this bump in the road relatively unscathed? That’s a cliffhanger you’ll have to wait it out for.
The American Institute of Architects (AIA) reported today that following on the heels of the first positive reading since January 2008, the Architecture Billings Index (ABI) dropped nearly two points in October.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.
The October ABI score was 48.7, down from a reading of 50.4 the previous month. This score reflects a decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.7, down slightly from a nearly three-year high mark of 62.3 in September.
“This is disappointing news, but not altogether that surprising,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “We were anticipating a slow recovery period and it is likely that there will be some fits and starts before conditions show consistent improvement. Right now, reluctance from lending institutions to provide credit for construction projects and a sluggish economy are the main impediments to a revival of the design and construction industry.”
Key October ABI highlights:
- Regional averages: Northeast (54.5), Midwest (51.8), South (48.6), West (44.3)
- Sector index breakdown: commercial / industrial (54.5), institutional (50.8), multi-family residential (49.1), mixed practice (43.2)
- Project inquiries index: 61.7
Via Real Estate Channel
The Architectural Billings Index for the nation was positive in September for the first time in two years, but billings in the western region that includes Colorado weren’t, according to the index released Wednesday.
The ABI, compiled by The American Institute of Architects, is a leading economic indicator of construction activity. It reflects the nine- to 12-month lag between when architecture firms bill clients and when funds for construction are spent.
September’s national ABI score was 50.4, up from 48.2 in August — and up for the fourth month in a row. A score of 50 and above represents an increase in billings.
“This is certainly encouraging news, but we will need to see consistent improvement over the next few months in order to feel comfortable about the state of the design and construction industry,” AIA Chief Economist Kermit Baker said in a statement.
The western area had the lowest regional ABI score for last month, at 44.5, a dip from 45.8 in August. But September’s western score was up significantly from 36.0 in September 2009.
The index breaks the country into four regions: Northeast, Midwest, South and West.
Both the northeastern and midwestern parts of the country had positive ABI scores for September, at 56.7 and 51, respectively. The South had a score of 47.
The ABI is based on a “work-on-the-boards” survey of AIA members by organization researchers. Members are asked each month whether their billings have increased, decreased or stayed the same for the month just ended.
The AIA is more than 150 years old, and based in Washington, D.C.
Hat tip to multiple sources including AIA, Denver Business Journal and Sam Armijos.
News brief – October 2010
Via Architecture & Design
A rebound in the architecture profession is helping drive the overall labor market recovery in Australia. Commenting on the rise in the official labor force figures yesterday, Westpac chief economist Bill Evans attributed the growth to a rebound in professions in law and architecture. “They’re quick to fire, but they’re quick to rehire as well,” says Evans. Mr. Evans was forecasting the unemployment rate to bottom out at 4.8 per cent halfway through next year.
Optimistically speaking. demand for architects seems understandably uncertain through the year 2011. While filling positions within the architectural field will depend on geographic location of employment, and specialty in the field, among many influences.
Since architect employment is affected more so by the overall trend of commercial building construction and re-development efforts than many construction-related positions, it will no doubt be subject to the downturn of the commercial real estate market that had hit the United States (spring of 2009 onward). But, in the event of a shifting emphasis toward rehabilitating and transforming existing structures, if new construction costs continue to rise across many parts of the country, architects may look more toward employment with firms that are well established.
Overall, a large number of commercial architects may find opportunities slim, depending on their specialty. Although areas such as those involved with healthcare, security, defense and technology; positions may hold or even increase in the coming years depending on the effects and whereabouts of funding brought about by the Obama administration efforts. Architect jobs in the residential sector can probably expect to experience a downgrade given the state of new residential housing starts (early 2009) although this might turn if affected by favorable interest rates and banking procedures. Still, since the service of the residential sector is mainly comprised of the self-employed, trends of employment in this sector is debatable as many architects may transfer from private/contractor employer firms.
The entire architect job market will undergo rising competition. Demanding proven experience and track records and abilities for those well seated in the workplace and while becoming more specialized for those entering the workplace. Computer CAD has long since become a given requirement.
Competition for entry level positions on-up is likely to produce a wealth of labor and choices for employers of architects.
Hat tip to Referworks
Take our new LinkedIn poll on setting design fees during a recession.
Commercial/industrial sector reports growth for third consecutive month
Summary: Although billings at architecture firms declined for the 30th consecutive month in July, the ABI score increased by nearly two points from the previous month, inching closer to 50. In addition, business conditions continue to improve at firms with a commercial/industrial specialization, despite persistent weakness in the general economy. Survey panelists report that the design phase for nearly half of their projects lasts for less than six months, and that the complexity of the project is the most important influence on the length of that design phase.
The AIA’s Architecture Billings Index (ABI) score for July inched closer to the 50-point threshold again (a score higher than 50 is an indication of growth), climbing nearly two full points from June to 47.9. While there is growing optimism that billings may grow in the near future, business conditions at many architecture firms remain tenuous, with relief still a long way off.
Inquiries into new work have grown for 16 of the last 17 months, but this month’s score of 53.1 is the lowest since the beginning of the year. However, this may represent a leveling out of the glut of RFPs that firms have been receiving in recent months that have not translated into actual billable work.
Business conditions remain weak at architecture firms in all regions of the country. Firms in the Northeast continue to report the highest scores, but they have been weakening every month since very minimal growth was reported in April. The score increased in the South for the fifth month in a row in July, and is approaching 50 for the first time in more than two years.
Firms with a commercial/industrial specialization reported growth for the third month in a row in July, and while it remained minimal, it is still a positive sign. The highest score in nearly two years for that sector was reported at firms with an institutional specialization, amid reports that building projects funded under the stimulus program are beginning to wrap up.
The most recent issue of the Federal Reserve’s Beige Book reports that, for the most part, the commercial and industrial real estate market remains weak in all regions of the country. However, while vacancy rates in many areas are flat or increasing, office/retail leasing actually has been increasing in New York City. Construction activity continues to weaken in the Atlanta, Minneapolis, Dallas, and Cleveland, but public infrastructure construction is on the rise in Chicago, and most Federal Reserve Board districts anticipate slow growth in commercial/industrial real estate in the near future. And, employment data continues to paint a mixed picture. While overall nonfarm payroll employment declined by 131,000 positions in July, the private sector continued to add jobs, with an additional 71,000 positions. Construction employment remains relatively flat, shedding just 11,000 jobs in July.
This month’s special questions followed up on last month’s questions about the timing of project design phases. Survey respondents reported that the largest share of their projects (42%) have a design phase (defined as lasting from the awarding of the design contract to the completion of the construction documents) that lasts less than six months, while an additional 24% of projects have a design phase typically lasting between six and nine months. Small firms are much more likely to have shorter design phases than large firms, with 59% of projects at firms with less than $250,000 in annual billings having design phases of less than six months, compared to just 23% of projects at firms with annual billings of $5 million or more. Projects at firms with an institutional specialization also tend to have a slightly longer design phase, with nearly half (47%) of projects at those firms having a design phase lasting between six and 12 months.
Our panelists indicated that the complexity of a project is the most important influence on the length of the design phase, followed by project size (construction value), type of client, and scope of design services offered. The project delivery method (e.g., design-build, design-bid-build, integrated project delivery) was not considered to be a very important factor.
To View Additional Charts click here.
Article via AIA.org
It’s hard to tell if the recession is over, with the high unemployment rate. But there are strong signs of recovery in the online job market. Annual growth rate is up 21% overall since July, 2009, according to Monster’s Employment
Index. Here are eight occupations in which employers are hiring – using online ads – at the fastest rate. (Learn more about the compound annual growth rate, in CAGR: The Good, The Bad And The Ugly.) …
2. Business and Financial Operations
3. Transportation and Material Moving
4. Arts, Design, Entertainment, Sports and Media
5. Architecture and Engineering – Increase: 23%
As our population grows, so does our need for buildings to live, work and shop in, which is why we need more architects. Although outsourcing of basic architectural design overseas hurts employment, American jobs in architecture and engineering are forecasted to grow by 16% over the next eight years. Think green, creative and innovative if this is your industry, and the jobs will follow. (Learn more about outsourcing, in The Globalization Debate.)
7. Construction and Extraction
8. Healthcare Support
The Bottom Line
Online job postings have increased in almost every sector according to Monster’s Employment Index, with computer, education and office and administrative jobs also seeing double-digit percentage growth. So what does this mean for our economy? What’s important to note about Monster’s numbers is that mining, manufacturing and transportation and warehousing are the industries showing the largest growth – with mining seeing an impressive 53% gain since 2009. Any economic analyst will tell you this means an increase in production, a possible early indicator of economic recovery. Good news, even if you’re not looking for a job.
View all 8 ocupations via Financial Edge
By: Ernest Beck
The second installment of our series on architectural fees finds that increased competition for even the smallest of projects is leading firms to slash rates. But have things gone too far?
When a major New York financial institution asked three architecture firms to submit bids for a high-end office renovation last year, it was a relatively small project, but one that was eagerly sought by the bidders to keep revenue flowing in tough times. What transpired reflects the cutthroat nature of the industry these days: Two firms came in at around $175,000, while the third offered a bargain-basement price of $100,000, according to one of the participants, who asked to remain anonymous to protect client confidentiality.
Not surprisingly, the low bidder won, prompting an angry response from one of the other bidders. “If we went in at $160,000, it would have been low-balling—and dangerously low—but not impossible,” says this person, principal of a small New York design boutique that specializes in interior renovations. “But bidding $100,000 is impossible. … [T]hey won’t make any money.”
The recession has wreaked havoc on the architecture industry in many ways, from a rollback in projects to staff layoffs to declining revenue. One of the most devastating aftershocks, however, has been the practice of fee-cutting, as firms struggle to survive by meeting client demands to save money and tighten budgets.
While no exact numbers are available, architects say fee-cutting is widespread. Scott Kuehn, partner at Denver-based H+L Architecture, an 85-person firm that specializes in healthcare, education, science, and technology, had one long-term client ask for a 10 percent cut on all future work. This client, Kuehn says, “indicated that economic pressure and uncertainties … were driving similar requests to all business partners, suppliers, and vendors.”
For complete article click here.
NEW YORK | Tue Aug 17, 2010 9:06am EDT
(Reuters) – U.S. housing starts rose but to a much weaker rate than expected in July, while permits for future home construction fell to their lowest level in more than a year, according to a government report on Tuesday that pointed to a weak housing market.
U.S. producer prices rose in July for the first time in four months, pulled by higher prices for food and consumer goods, a U.S. government report showed on Tuesday.
HOUSING STARTS: * The Commerce Department said housing starts rose 1.7 percent to a seasonally adjusted annual rate of 546,000 units. * June’s housing starts were revised to show an 8.7 percent fall, which was previously reported as a 5 percent drop. * Analysts polled by Reuters had expected housing starts to rise to 560,000 units. * Compared to July last year, groundbreaking activity was down 7 percent. * New building permits, which give a sense of future home construction, dropped 3.1 percent to a 565,000-unit pace last month, the lowest level since May 2009. * That followed a 1.6 percent rise in June and compared to analysts’ forecasts for a slip to 580,000 units.
PRODUCER PRICE INDEX: * The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate rose 0.2 percent, in line with Wall Street analyst expectations, after dipping 0.5 percent in June. * In the 12 months to July, producer prices increased 4.2 percent after rising 2.8 percent in May. * The year-on-year increase was also in line with forecasts.
JOHN CANALLY, INVESTMENT STRATEGIST, ECONOMIST, LPL FINANCIAL, BOSTON:
“The market’s looking for some inflation and we got some on both the core and overall (PPI), which should ease some deflation fears.
“But on the other side of the coin, we had the housing starts data which got a bounce from the prior month, which was expected, but the bounce was a little softer than we thought.
“We’re still getting data post-housing credit that is still weak and not indicative of a market that can sustain itself.
“That ties into a lot of other data recently that has the market worried about a double dip. We still think it’s slow growth rather than a double dip, but each week that passes you tend to get a little more concerned if you don’t get better activity indicators.”
CAMILLA SUTTON, CURRENCY STRATEGIST, SCOTIA CAPITAL, TORONTO:
“It’s a mixed set of data, with a disappointing reading on housing starts and building permits and a slightly stronger PPI report. Actually, at this point some signs of inflation would be soothing to markets amid fears of deflation. But ongoing problems with the housing markets are so great that it will likely offset any positive effect from an increase in prices.” “Forex markets are just taking a breather after the violent swings of last week in euro/dollar and dollar/yen. Traders are still looking for a catalyst to take the dollar in one direction or the other.”
MARK VITNER, SENIOR ECONOMIST, WELLS FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA:
“This is more of a payback from the end of the tax credit. It is not that surprising given the NAHB numbers that were out yesterday which showed really abysmal buyer traffic and expectations for future sales are about as low as they were back before the tax credit was even passed.
“We had the previous month’s number revised down a little, and we had a nice pop in multi-family, which people kind of forget about because it is so low right now, without that the drop would have been worse.”
BRIAN DOLAN, CHIEF CURRENCY STRATEGIST, FOREX.COM, BEDMINSTER, NEW JERSEY:
“Both these indicators are languishing. It’s nothing new to see the housing market stuck in a rut. On PPI, the core inflation is up a little more than expected year-over-year, which might cause some moderation in U.S. yields. That would help the dollar recover a bit against the yen. But the sentiment out there is there are still problems to come, and with the 10-year yield at 2.60 percent, there’s absolutely no reason for the dollar to rally against the yen right now. We expect another run at 85 yen and then a move to the 84.70-80 area.”
JIM BARRETT, SENIOR MARKET STRATEGIST, LIND-WALDOCK, CHICAGO:
“The slow growth will continue. It perfectly reflects the mood we are in with the under-utilization. We are barely moving forward.”
MARKET REACTION: STOCKS: U.S. stock index futures pare gains after housing, PPI data. BONDS: U.S. Treasury debt prices hold losses. DOLLAR: U.S. dollar remains lower versus euro.