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Architecture billings index declines

After three months of improving conditions, the Architecture Billings Index fell nearly three points. As a leading economic indicator of the construction industry, the ABI reflects the approximate nine to twelve months lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI was 45.8, down from 48.4 the month prior. This score highlights the continued decline in demand for design services. Additionally, the figure comes on the heels of the highest score in January 2008 when revenue at architecture firms headed into recession.

“This dip is somewhat of a surprise since it appeared that conditions were pointing toward a recovery,” AIA Chief Economist Dr. Kermit Baker said in a release.

“The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in economic development.”

Baker added, “An amendment has passed the House that would help lenders and borrowers as they attempt to work out their loans under terms that are mutually acceptable, avoid large numbers of commercial foreclosures, and free up credit that can be used more constructively. If this passes in the Senate, then some much needed relief will be available for the struggling design and construction industry.”


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