The American Institute of Architects (AIA)'s Architecture Billings Index (ABI) dropped precipitously in June, following a spring season in which the pace of decline had slowed substantially. June's ABI rating was 37.7, down nearly five points from May's 42.9 reading and much closer to February's 35.3 reading. The billings index rating has been negative for the past 18 months but began trending upward in March 2009, when it exceeded 40 for the first time since September 2008. The ABI's March and April readings were 43.7 and 42.8, respectively.
"It looked like we were moving toward a recovery this spring, and it looks like that recovery has been pushed out a bit further now for architecture firms," says the AIA's chief economist Kermit Baker, Ph.D., Hon. AIA. "The recovery we were anticipating or seemed to be moving toward is a bit more elusive than we had hoped for."
On the other hand, the new projects inquiry score held fairly steady at 53.8, making June the fourth consecutive month in which it exceeded 50. Regionally, the Northeast scored highest at 42.8, followed by the South (40.5), West (39.9), and Midwest (36.2).
Some architecture sectors are faring better than others. In June, mixed practices scored 43.5, followed by multifamily residential practices at 42.7, commercial/industrial practices at 39.5, and institutional practices at 37. "The good news for residential architects is that it looks like their principal market is finally beginning to see some relief," Baker notes. "One of the strongest sectors in June was the residential sector, and I wouldn't be surprised to see that trend moving forward. It will probably report better numbers than the rest of the profession over the next six to nine months."
As economic troubles continue to mount, the time frame for the housing industry's recovery remains uncertain, as does that of the architecture industry's recovery. The hoped-for effects of the federal stimulus will benefit much of the architecture industry mostly indirectly, Baker reports, since it targeted primarily shovel-ready public works, infrastructure, energy retrofits and modernization of government buildings, and energy tax credits for residential energy efficiency upgrades.
"[Architecture] is a profession in an industry that's just going through some real tough times now," he adds. "We'll see a little movement up and down as we move through this recession, I think. It's going to be a rocky recovery."