Wednesday, September 23, 2009

So much for that ABI turnaround

The American Institute of Architects' Architecture Billings Index gave back some of the increase it registered in July as its August ABI rating was 41.7, down slightly from 43.1 in July. That July number was a six-point increase over June, so while things were a bit sluggish in August, they are still above what they had been in June.

That said, the August numbers represent the continuation of an up-and-down pattern that has plagued the ABI all summer and is indicative of the changing nature of the economy. The index was 42.9 in May, dipped to 37.7 in June, increased to 43.1 in July, and now dipped to 41.7 in August.

This type of pattern makes it difficult for A/E firms to make strategic decisions with any certainty that their fortunes are turning for the better.

Then again, the new projects score in August 21 was 55.2, up from 50.3 in July and above the 53.8 in June.

"While there have been occasional signs of optimism over the last few months, the overwhelming majority of architects are reporting that banks are extremely reluctant to provide financing for projects, and that new equity requirements and conservative appraisals are making it even more difficult for developers to get loans," said AIA Chief Economist Kermit Baker. "Until the anxiety within the financial community eases, these conditions are likely to continue."

Regional averages were as follows: Northeast (45.2, up sharply from 37.8 in July and 42.8 in June, but still below the 48.3 in May and 47.1 in April), South (44.1, up from 43.4 in July and 40.5 in June), Midwest (43.0, up from 36.9 in July), and West (37.5, down from 39.7 in July, 39.9 in June, 39.4 in May, and 39.2 in April).

The August ABI breaks down by sector as follows: commercial/industrial (45.6, up from 42.9 in July and 39.5 in June), multi-family residential (43.4, up from 40.7 in July and 42.7 in June), mixed practice (41.4, down from 42.9 in July, 43.5 in June, 44.5 in May, 44.2 in April, and 44.0 in March), and institutional (37.5, up from 37.1 in July and 37.0 in June).


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