After January's historic low score, the AIA's Architecture Billings Index (ABI) improved by two points in February to 35.3, up from the 33.3 mark in January, but still pointing to a general lack of demand for design services. The new project inquiry score was 49.5, up from 43.5 in January.
"Despite a higher score than last month, we are likely to see light demand for new construction projects through much of the year," said AIA Chief Economist Kermit Baker. "There is hope that the ($787 billion) stimulus bill will result in more project activity, but that is also dependent on banks easing lending standards in the months ahead. Still, the improvement in the inquiries index does provide hope that some stalled projects will resurface in the near future."
As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. Any score above 50 indicates an increase in billings.
Regionally, the ABI breaks down as follows: West (36.4, down from 38.3 in January), South (35.5, up from 34.4 in January), Midwest (35.0, up from 34.6 in January), Northeast (32.3, up from 29.8 in January). The sector index breakdown is as follows: mixed practice (40.1, up from 39.6 in January), institutional (36.8, down from 37.1 in January), multi-family residential (33.3, up from 29.5 in January), commercial/industrial (32.0, down from 33.8 in January).
Ed
Wednesday, March 18, 2009
Thursday, February 26, 2009
Australia's economy shows resilience, but storm clouds lie ahead
This article from The Australian talks about how firms there invested strongly in the fourth quarter despite the global crisis, but Australia's treasurer says that Treasury forecasts released earlier this month show that business investment will slow in the coming months.
Private new capital spending on buildings and equipment in Australia rose 6 percent to $24.89 billion in the fourth quarter of 2008 from $23.49 billion in the third quarter, according to the Australian Bureau of Statistics. Economists on average expected that spending in the fourth quarter 2008 would fall 3.3 percent on a quarterly basis, and rise 5 percent for the year.
The strength in investment increases the chance that Australia's economy continued to grow in the closing quarter of 2008. Forward estimates of investment were scaled back, but not by the 10 percent to 20 percent range expected by some economists.
The article states that the data highlights the relative strength of the Australian economy amid the global crisis, raising expectations that its own downturn will be shallow by comparison to major economies.
Economists said forecasts for economic growth in the fourth quarter are likely to be nudged higher. They also say the latest data should encourage expectations that the Reserve Bank will keep interest rates steady at a policy meeting next week.
According to a senior economist at RBC Capital Markets, the data shows surprising strength, but it is likely to be the 'last wave' of spending. She said the numbers are probably a residual effect of the investment boom that fueled the economy in recent years, but that the outlook will still be 'soft.'
Ed
Private new capital spending on buildings and equipment in Australia rose 6 percent to $24.89 billion in the fourth quarter of 2008 from $23.49 billion in the third quarter, according to the Australian Bureau of Statistics. Economists on average expected that spending in the fourth quarter 2008 would fall 3.3 percent on a quarterly basis, and rise 5 percent for the year.
The strength in investment increases the chance that Australia's economy continued to grow in the closing quarter of 2008. Forward estimates of investment were scaled back, but not by the 10 percent to 20 percent range expected by some economists.
The article states that the data highlights the relative strength of the Australian economy amid the global crisis, raising expectations that its own downturn will be shallow by comparison to major economies.
Economists said forecasts for economic growth in the fourth quarter are likely to be nudged higher. They also say the latest data should encourage expectations that the Reserve Bank will keep interest rates steady at a policy meeting next week.
According to a senior economist at RBC Capital Markets, the data shows surprising strength, but it is likely to be the 'last wave' of spending. She said the numbers are probably a residual effect of the investment boom that fueled the economy in recent years, but that the outlook will still be 'soft.'
Ed
More news from Down Under
Remember that post from last week about how the AIA had released pro bono guidelines for architects? Well, it turns out architects in Australia are offering their services on an initial pro bono basis to local councils for projects worth more than $1 billion under a partnership between the Australian Local Government Association and the Australian Institute of Architects.
According to a release posted on www.architecture.co.au, the projects are for the construction of community facilities such as sports grounds, libraries, sports centers, and town halls. A total of $500 million will be allocated to councils under the Regional and Local Community Infrastructure Program, which is a key part of the federal government's stimulus packages. Additional expenditure is expected to be contributed by councils.
In announcing the partnership, both ALGA and Australian Institute of Architects officials said architects could help councils, particularly small and under-resourced councils, ensure that projects are submitted by the March 6 deadline.
The Australian Federal Government will give preference to projects that can be commenced within six months of signing a funding agreement and which can be substantially completed by the end of next year.
No word in the press release about "shovel ready" projects, by the way.
Ed
According to a release posted on www.architecture.co.au, the projects are for the construction of community facilities such as sports grounds, libraries, sports centers, and town halls. A total of $500 million will be allocated to councils under the Regional and Local Community Infrastructure Program, which is a key part of the federal government's stimulus packages. Additional expenditure is expected to be contributed by councils.
In announcing the partnership, both ALGA and Australian Institute of Architects officials said architects could help councils, particularly small and under-resourced councils, ensure that projects are submitted by the March 6 deadline.
The Australian Federal Government will give preference to projects that can be commenced within six months of signing a funding agreement and which can be substantially completed by the end of next year.
No word in the press release about "shovel ready" projects, by the way.
Ed
Friday, February 20, 2009
What constitutes "shovel ready"?
With so much talk lately about "shovel ready" projects and how they will benefit from the economic stimulus bill signed into law earlier this week by President Obama, this is an interesting article about what in Terre Haute, Indiana, counts as a "shovel-ready" project.
While lots of projects seem shovel ready, in fact, only two projects in the city of Terre Haute are shovel ready. As the city's mayor, Duke Bennett, says in the article, there are many restrictions in the stimulus bill, which keeps many projects from qualifying as shovel ready.
"To be truly shovel ready, you have to have engineering drawings, you basically have to have the thing totally designed," Bennett says in the article. "Then you have to have your environmental work done and you have to have all your property acquisition done."
If a project receives any federal funding, it is not eligible for stimulus money, according to the article.
For an analysis of how the stimulus bill will impact the AEC industry, check out The Obama Infrastructure Plan: A Supplement to PSMJ's 2009 AEC Firm U.S. Market Sector Forecast. Free with your order, you'll also receive PSMJ's Analysis of Economic Indicators for Markets Served by A/E Firms: 1st Quarter 2009. This report provides quantitative data on major market sectors AND the submarkets and regions that the North American A/E industry serves.
Ed
While lots of projects seem shovel ready, in fact, only two projects in the city of Terre Haute are shovel ready. As the city's mayor, Duke Bennett, says in the article, there are many restrictions in the stimulus bill, which keeps many projects from qualifying as shovel ready.
"To be truly shovel ready, you have to have engineering drawings, you basically have to have the thing totally designed," Bennett says in the article. "Then you have to have your environmental work done and you have to have all your property acquisition done."
If a project receives any federal funding, it is not eligible for stimulus money, according to the article.
For an analysis of how the stimulus bill will impact the AEC industry, check out The Obama Infrastructure Plan: A Supplement to PSMJ's 2009 AEC Firm U.S. Market Sector Forecast. Free with your order, you'll also receive PSMJ's Analysis of Economic Indicators for Markets Served by A/E Firms: 1st Quarter 2009. This report provides quantitative data on major market sectors AND the submarkets and regions that the North American A/E industry serves.
Ed
AIA releases pro bono guidelines for members...huh?
We found the AIA's e-mail this week touting its just-released AIA Pro Bono Guidelines for AIA Membes and Firms interesting, to say the least. And we weren't alone. Take it from PSMJ Founder and CEO Frank Stasiowski, who said, "Great timing...now architects should work for FREE...unbelievable."
The AIA does acknowledge that during tough economic times, not-for-profit groups are stretched beyond their capacity and that architects and design professionals can help solve issues facing communities. And the AIA's marketing copy for the Guidelines claim that pro bono work offers public awareness and prestige, as well as marketing that money can't buy.
But it's a bit of a logic leap to suggest that firms struggling to keep the lights on and keep their people busy, or employed at all, should work for free. Good idea, bad time for it.
Ed
The AIA does acknowledge that during tough economic times, not-for-profit groups are stretched beyond their capacity and that architects and design professionals can help solve issues facing communities. And the AIA's marketing copy for the Guidelines claim that pro bono work offers public awareness and prestige, as well as marketing that money can't buy.
But it's a bit of a logic leap to suggest that firms struggling to keep the lights on and keep their people busy, or employed at all, should work for free. Good idea, bad time for it.
Ed
Wednesday, February 18, 2009
$787 billion stimulus package signed into law
President Barack Obama yesterday signed into law the massive $787 billion economic stimulus bill that he claimed will, among other things, rebuild the nation's crumbling infrastructure and schools.
High-speed rail received $9.3 billion in funding while school construction has no specified funding in the final package even though the original House bill had $20 billion and the original Senate bill had $19.5 billion, according to ENR. However, lawmakers did allow school modernization projects to be eligible for some of the $39.5 billion in "state fiscal stabilization" funds set aside for a range of educational purposes. It's up to local school districts to decide how much of their shares of that $39.5 billion would go for such uses as hiring or retaining teachers or for upgrading buildings, according to the ENR article.
For an analysis of how the stimulus bill will impact the AEC industry, check out The Obama Infrastructure Plan: A Supplement to PSMJ's 2009 AEC Firm U.S. Market Sector Forecast. Free with your order, you'll also receive PSMJ's Analysis of Economic Indicators for Markets Served by A/E Firms: 1st Quarter 2009. This report provides quantitative data on major market sectors AND the submarkets and regions that the North American A/E industry serves.
Ed
ENR and the Associated General Contractors estimate that the package provides more than $130 billion in construction spending, with transportation receiving the largest share-- more than $49 billion, with $27.5 billion of that for highways.
High-speed rail received $9.3 billion in funding while school construction has no specified funding in the final package even though the original House bill had $20 billion and the original Senate bill had $19.5 billion, according to ENR. However, lawmakers did allow school modernization projects to be eligible for some of the $39.5 billion in "state fiscal stabilization" funds set aside for a range of educational purposes. It's up to local school districts to decide how much of their shares of that $39.5 billion would go for such uses as hiring or retaining teachers or for upgrading buildings, according to the ENR article.
For an analysis of how the stimulus bill will impact the AEC industry, check out The Obama Infrastructure Plan: A Supplement to PSMJ's 2009 AEC Firm U.S. Market Sector Forecast. Free with your order, you'll also receive PSMJ's Analysis of Economic Indicators for Markets Served by A/E Firms: 1st Quarter 2009. This report provides quantitative data on major market sectors AND the submarkets and regions that the North American A/E industry serves.
Ed
Architecture Billings Index hits a(nother) all-time low
Proving that December's slight increase was nothing more than a fluke, the AIA's Architecture Billings Index dropped to a historic low level in January.
Following consecutive months with record low scores, the December ABI rating was 34.1. (The AIA originally announced that the December 2008 ABI was 36.4, but according to a press release announcing the January numbers, "Every January, the AIA research department uses a formula from the Department of Commerce that re-estimates ABI data based on seasonal factors, resulting in a recalibration of recent figures." That explains the discrepancy.)
However, the American Institute of Architects reported the January ABI rating was 33.3, which marks the lowest rating for the index since its inception in 1995. Any score above 50 indicates an increase in billing. The inquiries for new projects score was 43.5, up from the adjusted figure of 38.5 in December. Because the index is a leading indicator of construction activity, the ABI shows an approximate 9- to 12-month lag time between architecture billing and construction spending. This means we will likely not see much construction activity in 2009.
"Now that the stimulus bill has passed and includes funding for construction projects, as well as for municipalities to raise bonds, business conditions could improve," said AIA Chief Economist Kermit Baker. "That said, until we can get a clearer sense of credit lines being made available by banks, it will be hard to gauge when a lot of projects that have been put on hold can get back online."
Regionally, the ABI breaks down as follows: West (38.3, up from the adjusted 37.1 figure in December), Midwest (34.6, up from the adjusted 34.3 in December), South (34.4, up from the adjusted 34.0 in December), and Northeast (29.8, down from the adjusted 31.9 in December). Sector by sector, the ABI breaks down thusly: mixed practice (39.6, down from the adjusted 41.5 in December), institutional (37.1, down from the adjusted 38.3 in December), commercial/industrial (33.8, down from the adjusted 30.4 in December), multi-family residential (29.5, which was also the adjusted number for December). According to the AIA, the regional and sectoral averages are three-month moving averages, due to the small sample size.
Ed
Following consecutive months with record low scores, the December ABI rating was 34.1. (The AIA originally announced that the December 2008 ABI was 36.4, but according to a press release announcing the January numbers, "Every January, the AIA research department uses a formula from the Department of Commerce that re-estimates ABI data based on seasonal factors, resulting in a recalibration of recent figures." That explains the discrepancy.)
However, the American Institute of Architects reported the January ABI rating was 33.3, which marks the lowest rating for the index since its inception in 1995. Any score above 50 indicates an increase in billing. The inquiries for new projects score was 43.5, up from the adjusted figure of 38.5 in December. Because the index is a leading indicator of construction activity, the ABI shows an approximate 9- to 12-month lag time between architecture billing and construction spending. This means we will likely not see much construction activity in 2009.
"Now that the stimulus bill has passed and includes funding for construction projects, as well as for municipalities to raise bonds, business conditions could improve," said AIA Chief Economist Kermit Baker. "That said, until we can get a clearer sense of credit lines being made available by banks, it will be hard to gauge when a lot of projects that have been put on hold can get back online."
Regionally, the ABI breaks down as follows: West (38.3, up from the adjusted 37.1 figure in December), Midwest (34.6, up from the adjusted 34.3 in December), South (34.4, up from the adjusted 34.0 in December), and Northeast (29.8, down from the adjusted 31.9 in December). Sector by sector, the ABI breaks down thusly: mixed practice (39.6, down from the adjusted 41.5 in December), institutional (37.1, down from the adjusted 38.3 in December), commercial/industrial (33.8, down from the adjusted 30.4 in December), multi-family residential (29.5, which was also the adjusted number for December). According to the AIA, the regional and sectoral averages are three-month moving averages, due to the small sample size.
Ed
Subscribe to:
Posts (Atom)
Posts
