CLOSE AD ×

Billings Still Slogging Toward Salvation

Billings Still Slogging Toward Salvation

Though still a long way from robust, the AIA’s Architecture Billings Index inched upward for the third straight month in August, signaling continued progress along the track toward recovery and lending some credence to the National Bureau of Economic Research’s , according to numbers released by the AIA yesterday. Offering further optimism for the future, inquiries for new projects also increased last month to 54.6 from 53.1 in July. That number, however, has bounced downward in recent months from a rally that reached 60.7 last November, suggesting that considerable volatility remains in real estate circles as clients take a wary approach to new projects. (Any score above 50 indicates an increase in billings or inquiries, below 50 signals a decrease.)

While the August numbers are heartening news, the overall picture points to what may be a long, slow slog out of the economic trough, since billings have not yet broken back into positive territory and broader business trends offer little cause for celebration. “I expect it to continue to move up, but move up fairly slowly in the months ahead,” said Kermit Baker, chief economist for the AIA. “It doesn’t seem like there’s much propelling new activity, so it’s going to be a fairly prolonged time before we see much acceleration.”

The brightest spot remains the commercial and industrial sector, which continued its push into positive territory as the only sector above the 50 mark, showing a reading of 50.6—the fourth straight month of positive growth. Baker cited early signs of job growth and an uptick in business confidence, which has translated into a modest increase in corporate and industrial work. “We’ve had a pretty strong year of business investment on the software and equipment side, and that usually leads to a recovery on the building side,” he said. “We’re in the early stages of that.”

The other sectors showed no such pluck. Institutional work, which has wavered over the past 12 months, took another downswing in August, ending a two-month rally and sliding to 46.0, down from 47.9 in July. The residential sector, which has been stagnant since February, performed similarly, ending the month at 46.9, down from 47.5.

Regionally, the trends were more encouraging, with the upswing in manufacturing activity pushing the Northeast above 50 for the first time since May, to 50.9. The Midwest and West also increased, to 49.2 and 45.8 respectively, while the South, continuing to battle the aftershocks of the housing bust, ended a five-month trend of growth, dropping to 45.3.

As bittersweet confirmation, the Northeast’s good fortune was seconded by real estate investment firm Eastern Consolidated, which found that New York’s construction industry added 1,700 jobs in August, making it the city’s second-best performing sector after retail. But in reporting those figures, The Real Deal noted that contractors’ relative good cheer definitively didn’t spread to design firms, which continue to be plagued by layoffs. In fact, the city’s architecture sector lost another 200 jobs last month, according to the report, bringing the yearly total to 1,200 vanished jobs—4.8 percent of the workforce this year and a whopping 22.8 percent since August 2008.

CLOSE AD ×