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Construction Safety Dispatch Articles
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Billings at architecture firms dropped sharply in July, with the Architecture Billings Index (ABI) again dropping 1.2 points last month following a one-point drop in June, according to the American Institute of Architects (AIA).
The AIA reported the July score was 45.1, the steepest decline in billings since February 2010, after a reading of 46.3 the previous month. The index fell for the fifth consecutive month, including the fourth straight month of decline in demand for design services. A score higher than 50 indicates an increase in billings by design services firms.
"Business conditions for architecture firms have turned down sharply," said AIA Chief Economist Kermit Baker. "Late last year and in the first couple of months of this year, there was a sense that we were slowly pulling out of the downturn, but now the concern is that we haven’t yet reached the bottom of the cycle.
"Current high levels of uncertainly in the economy don’t point to an immediate turnaround."
The index reflected weak demand across all sectors and regions, including commercial/industrial, 47.9; institutional 47.2; mixed practice 47.1; and multifamily residential, 44.7. The South posted 46.9; West, 46.6; Northeast, 46.4 and Midwest 44.9.
A separate index measuring new projects inquiries was 53.7, a considerable slowdown from a reading of 58.1in June, the architects group said.
Even positive news on the construction front this week came with a strong caveat as a result of the recent economic turmoil. The Associated Builders and Contractors (ABC) this week reported that its Construction Backlog Indicator (CBI), a forward-looking indicator that measures the amount of U.S. construction work under contract to be completed in the future, increased 10% in the second quarter to an average of 8.1 months.
The figure is up from 7.3 months the previous quarter and 12% higher than a year ago. However, a broader look at the data reveals that the rise in construction activity may reflect economic momentum that existed several months ago but is now beginning to weaken, said ABC Chief Economist Anirban Basu.
"The events of the last few weeks have had a negative impact on both the overall economy and the nation’s construction sector, with business leaders generally seeking to reduce exposure to risk and investment volatility," Basu said.
Although average construction backlog has been on the rise in recent months, future surveys are likely to reflect a reversal of the trend -- and may lead to a chill in the nation’s building recovery, Basu said.
"None of this is good news for construction contractors or others hoping for a far ranging, more aggressive economic rebound," he said.
Source: Randyl Drummer, CoStar
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