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U.S. architecture billings index falls in January

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U.S. architecture billings index falls in January

David McFadden | architects, architecture, architecture jobs, construction, Hiring trends, jobs, recession, unemployed architects | February 23, 2011

* January ABI 50.0, down 3.9 pts

* New projects index falls 5 pts to 56.5

* Cautious optimism for design industry: AIA

NEW YORK, Feb 23 (Reuters) – A leading indicator of U.S. nonresidential construction activity weakened last month after two months of improving numbers, an architects’ trade group said on Wednesday.

The monthly Architecture Billings Index fell almost 4 points in January to 50.0, a level that indicates neither expansion nor contraction of demand for design services, the American Institute of Architects said.

The billings index is considered a predictor of construction spending about nine to 12 months in the future, since buildings are designed long before they are erected. The latest readings suggest an anticipated recovery in U.S. nonresidential construction may not gain traction this year.

A separate index of inquiries for new projects fell more than five points to 56.5, according to the AIA.

“This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year,” said AIA chief economist Kermit Baker. “We’ve been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook.”

The AIA’s billings index dropped below 50 in January 2008, indicating falling demand, and stayed below that mark until last November. The separate inquiries index only fell below 50 briefly in 2008. It is typically higher than the billings index, as prospective customers solicit bids from multiple architecture firms.

Most diversified industrial companies get at least some revenue from nonresidential construction, selling machinery used for erecting buildings or components such as elevators or electrical and cooling systems.

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After working at various design practices on a full-time and freelance basis and starting his design firm, David McFadden saw a gap in the industry. In 1984, he created an expansive hub for architects and hiring firms to sync up, complete projects, and mutually benefit. That hub was Consulting For Architects Inc., which enabled architects to find meaningful design work while freeing hiring firms from tedious hiring-firing cycles. This departure from the traditional, more rigid style of employer-employee relations was just what the industry needed – flexibility and adaption to current work circumstances. David has successfully advised his clients and staff through the trials and tribulations of four recessions – the early ’80s, early ’90s, early 2000s, the Great Recession, and the pandemic.