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Architecture Practice
The downward spiral continues for the Architecture Billings Index Print E-mail
Thursday, 21 July 2011 12:27
Institutional sector struggling most because of government budget shortfalls

According the AIA, June marked the third consecutive decline in revenue at U.S. architecture firms as measured by the Architecture Billings Index (ABI).  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 American Institute of Architects (AIA) reported the June ABI score was 46.3, almost a full point from a reading of 47.2 the previous month.  This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings).  However, the new projects inquiry index was 58.1, up sharply from a mark of 52.6 in May.

“This seems to be a case of not thinking it can get any worse – and then it does,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “While a modest turn around 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.  Furthermore, the threat of the federal government failing to resolve the debt ceiling issue is leading to higher borrowing rates for real estate projects and should there actually be a default, we are likely looking at a catastrophic situation for a sector that accounts for more than ten percent of overall GDP.” 

Key June ABI highlights:

•    Regional averages: West (51.7), Northeast (47.5), South (47.3), Midwest (44.6)
•    Sector index breakdown: mixed practice (51.5),  commercial / industrial (50.0),  multi-family residential (49.6),  institutional (45.9) 
•    Project inquiries index: 58.1

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI.  These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.
AIA Issues Statement to Congress on Introduction of Transportation Reauthorization Proposal Print E-mail
Friday, 08 July 2011 11:52

AIA Urges Congress Not to Miss Opportunity to Revitalize Economy, Improve Safety

The American Institute of Architects (AIA) issued the following statement on the release of the transportation reauthorization proposal Thursday by House Transportation and Infrastructure Committee Chairman John L. Mica (R-Fla.)

The statement should be attributed to AIA President Clark Manus, FAIA:

“Whenever architects are hired by clients to design projects, their primary goal is for the design to be cost effective while being long-lasting – by investing now and realizing the paybacks over time. This proposal may cost less than a fully funded transportation bill, but the long-term costs to our country by failing to invest in a 21st Century transportation system are far-reaching.”

“The cost just to maintain our transportation infrastructure in a good state outpaces even current federal funding. It will not help communities address the congestion challenges they face, or offer people more options in how they travel.

“This reauthorization bill should be a rare opportunity to help re-design our communities and transportation networks to help enable the U.S. to remain competitive. “We urge Congress to keep this goal in mind as negotiations continue on this much needed transportation bill.”
Best business conditions since 2007 for residential market Print E-mail
Thursday, 30 June 2011 07:36
The AIA's Home Design Trends Survey has noticed that the decrease in home sizes and lots is nearing bottom. While we rejoice at the residential market picking up, we hope the tendency that prevailed back in 2007 to supersize those 'Macmansions' will keep decreasing.

According to the survey, the collapse of the housing market resulted in greater interest in smaller homes and lot sizes, but that appears to be leveling off. There continues to be interest from homeowners in investing in their properties, particularly with regards to outdoor living space.  Accessibility within the home remains a concern, especially for an aging population, along with ongoing demand for more flexible and open design within homes.  Business conditions for residential architects are showing improving conditions with the highest billings score since mid-2007.  These findings are from the American Institute of Architects (AIA) Home Design Trends Survey that focused specifically on overall home layout and use in the first quarter of 2011.
Can't seem to catch a break. Architecture Billings Index Remains in Reverse Print E-mail
Wednesday, 22 June 2011 06:42
News from the AIA's Architecture Billings Index were not so rejoicing as inquiries for new projects took a dip to the slowest pace of growth since February 2010
On the heels of a sizeable decrease in April, the Architecture Billings Index (ABI) slowed even further in May. 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 American Institute of Architects (AIA) reported the May ABI score was 47.2, a slight decrease from a reading of 47.6 the previous month. This score reflects a continued decrease in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 52.6, down from a mark of 55.0 in April, its lowest level in almost a year and a half.

“Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The broader economy looks to be entering another soft spot, and certainly state budget constraints are adversely affecting the profession’s ability to work on institutional projects. But there is no denying that the prolonged credit freeze from lenders for financing commercial projects is the number one challenge to a recovery for the design and construction industry.”

Key May ABI highlights:

Regional averages: West (49.3), Northeast (47.6), South (47.5), Midwest (45.9)
Sector index breakdown: multi-family residential (53.6), mixed practice (49.1) commercial / industrial (46.5), institutional (44.9)
Project inquiries index: 52.6

About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI.  These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.
Last Updated on Thursday, 23 June 2011 12:13
AIA: Architecture Billings Index Tumbles Nearly Three Points Print E-mail
Wednesday, 18 May 2011 06:35

The American Institute of Architects released today the results of April's ABI and news was not so rosy.

Following several months of relatively positive business conditions, the Architecture Billings Index (ABI) fell almost three points in April.  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 American Institute of Architects (AIA) reported the April ABI score was 47.6, a precipitous decrease from a reading of 50.5 the previous month.  This score reflects a sharp decrease in demand for design services (any score above 50 indicates an increase in billings).

The new projects inquiry index was 55.0, down from a mark of 58.7 in March, but still at a healthy level.

“The first question is whether this drop is a sign of an industry wide reversal in demand for design services or a bump in the road,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “The fact that most construction projects funded under the federal stimulus program have completed their design work, the anxiety around the possibility of a shutdown in the federal government in April, as well as the unusually severe weather in the Southeast had something to do with this falloff. However, the majority of firms are reporting at least one stalled project in-house because of the continued difficulty in obtaining financing.  That issue continues to be the main roadblock to recovery.”

Key April ABI highlights:

Regional averages: Northeast (51.2), Midwest (51.1), South (48.3), West (47.7)
Sector index breakdown: multi-family residential (53.9),  commercial / industrial (49.9),  institutional (45.9)  mixed practice (45.2)
Project inquiries index: 55.0

American Institute of Architects and U.S. Green Building Council Unveil National Report for Greening America’s Schools Print E-mail
Thursday, 12 May 2011 13:19
Report Highlights a Five-Point Action Plan to Achieve Green Schools

The American Institute of Architects (AIA) and the U.S. Green Building Council (USGBC) today unveiled Local Leaders in Sustainability: A Special Report from Sundance, which outlines a five-point national action plan that mayors and local leaders can use as a framework to develop and implement green schools initiatives.

“This report should serve as a guidepost for many communities throughout the country that are looking for ways to implement green initiatives but fear the expense involved,” said AIA President Clark Manus, FAIA. “In reality, the average school is 42 years old, and energy inefficiencies cost it approximately $100,000 a year, money that could be better spent on teachers, education materials, books or computers.”

New Standards for Broadloom and Carpet Tile Purchased by the U.S. Government Print E-mail
Written by Greta Houlahan   
Thursday, 28 April 2011 07:39

U.S. General Services Administration (GSA) Now Requires All Broadloom and Carpet Tile Purchased by the U.S. Government to Be Certified to NSF International's Sustainable Carpet Standard (NSF/ANSI 140) Gold Level

Current GSA carpet suppliers have until January 1, 2012 to certify their products to the NSF Sustainable Carpet Standard’s Gold Level in order for their carpet products to be considered for purchase

U.S. General Services Administration (GSA) Now Requires All Broadloom and Carpet Tile Purchased by the U.S. Government to Be Certified to NSF International's Sustainable Carpet Standard (NSF/ANSI 140) Gold Level.

The U.S. General Services Administration (GSA), which serves as the purchasing arm of the U.S. government and oversees more than $60 billion in purchased goods and services annually1, now requires Gold Level certification to NSF/ANSI 140 Sustainability Assessment for Carpet for all broadloom (wall-to-wall) carpet and carpet tile purchased through the GSA. Current GSA carpet suppliers have until January 1, 2012 to certify their products to NSF/ANSI 140 Gold Level in order for their carpets to be considered for purchase through the GSA (http://bit.ly/g5Ifgo).


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