Last week, the American Institute of Architects said it expected a rebound for firms by year end, and new numbers this week present more encouragement, albeit lukewarm. The latest AIA Architecture Billings Index, released Wednesday, found that payments in June rose a nominal two-tenths of a point to 46.0 from 45.8 in May. It may not be much of an improvement in a decline that now stands at 29 months, but at least work is headed in the right direction after May’s numbers halted a three-month rally this spring that reached 48.5 in April.
“Conditions at architecture firms continue to remain very soft, but we’re optimistic that they will improve before the end of the year,” AIA Chief Economist Kermit Baker said in a statement.
There were a few positive signs, as inquiries for new work rose to 57.7 from 55.5 in May, though that is also short of the 59.6 registered in April. A reading above 50 means the index is rising, and below that it is falling; the greater the difference, the steeper the rate of growth or loss.
The industrial/commercial sector remained the leader for work, the only indicator still in positive territory, though it did fall slightly, to 50.6 from 51.3 in May but remains above April’s 48.5. And while it still remains in negative territory, the institutional sector bounced back to 45.0 from 43.4 in May, though still below April’s 46.8. Mixed-use work fell the most of any sector—2.1 points to 44.7 from 46.8 in May, continuing a two-month decline. And multi-family residential work continues its long slide from January, when it hit 50.1. It dropped to 46.5 in June from 46.9 in May.
Regionally, the June numbers were far worse, as both the Northeast and Midwest continue to decline. The Northeast fell out of positive territory, all the way to 47.4 from 50.6 in May and 51.0 in April. The Midwest, the first region to break 50 back in March, hit 46.3 in June, down from 48.5 in May. The South and West, which have struggled for months, both saw gains, but they remain in foul territory. The South rose to 46.7 from 45.6, its best performance since the fall, while the West rose to 43.6 in June up from a dismal 42.9 in May but not quite the 44.7 the region saw in April.
“The steep decline in nonresidential property values has slowed investment in new facilities,” Baker said by way of explanation in his statement. However, in an interview last week, he expressed confidence that the industry would recover, and that there were limited economic indications of the much-feared “double dip” recession.
For proof, architects can perhaps look to their cousins in landscape architecture, where the American Society of Landscape Architects released its quarterly billings report yesterday. The group found that 65.4 percent said billings had improved or held steady during the second quarter, up from 56.4 percent in the first quarter and a miserable 32 percent this time last year.