That's the good news.
The bad news? This is the fifth straight month that the index remained below the 50 threshold, indicating that business levels at U.S. architecture firms continue to deteriorate.
As a leading economic indicator of construction activity, the ABI shows an approximate 9- to 12-month lag time between architecture billings and construction spending.
The AIA reported the June ABI rating was 46.1, up from 43.4 in May (any score above 50 indicates an increase in billings). The inquiries for new projects score was 51.8, up sharply from 46.5 in May.
"Very recently, the Midwest has been showing the best regional conditions," said AIA Chief Economist Kermit Baker. "But otherwise, these numbers are a continuation of weak conditions in the nonresidential construction sector. Given that inquiries for new project work have not seen much improvement, it's likely we are several months away from a turnaround."
Regionally, the ABI breaks down as follows in June: Midwest (51.8, down from 51.9 in May), South (49.9, up from 47.0 in May), Northeast (40.7, down from 41.7 in May), and West (36.1, down from 36.3 in May).
The ABI also tracks other sectors, most of which continue to indicate a downturn in billings:
- The index for institutional construction was 51.6, down from 53.9 in May, but still indicating more work on government buildings, schools, and hospitals.
- Commercial/industrial projects came in at 45.8, up 6.1 points from 39.7 in May, so while there were still fewer billings than in the previous month, the decline was not as steep.
- Mixed facilities dropped from 45.3 in May to 44.1 in June.
While the news remains bad for architecture firms, the declines have flattened a bit so there may be a light at the end of the tunnel. Will it last? The AIA doesn't think so. We'll have more later on the AIA's forecast for the rest of 2008 and 2009, but it doesn't look good.
Ed
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