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Demand for design services in the West drops slightly

Architectural firms in the West saw demand for design services decrease in November after three months of growth, according to the latest American Institute of Architects Architecture Billings Index released on Wednesday.

Last month, the West had a score of 49.6, down from October’s mark of 51.8, September’s score of 52.1 and August's 52.1.

“This is not at all that significant,” said Kermit Baker, American Institute of Architects chief economist. “It fell just below 50 and there wasn’t too much of a drop from the last few months.”

In November of last year, the West reported a score of 45.2 and in November 2010 the region saw a mark of 48.4.

The index reflects the approximate nine- to 12-month lag time between architecture billings and construction spending. Any score above 50 indicates an increase in billings.

The West was in a three-month stretch in which demand for architectural services was rising.

The last time the West saw any kind of run like this was in August 2007, when the West saw demand for services increase for 14 consecutive months.

The three other regions of the country all showed scores above 50 and billings increasing. The Northeast posted a mark of 56.3, followed by the Midwest at 54.4 and the South at 51.1.

On the whole, billings at architecture firms continue to increase in the United States.

The national ABI score in November was 53.2, up from October’s mark of 52.8, and the fourth month in a row in which national demand for design services increased. A year ago, the national ABI score was 51.3.

“These are the strongest business conditions we have seen since the end of 2007, before the construction market collapse,” Baker said. “The real question now is if the federal budget situation gets cleared up, which will likely lead to the green-lighting of numerous projects currently on hold. If we do end up going off the ‘fiscal cliff,’ then we can expect a significant setback for the entire design and construction industry.”

Also last month, the Architecture Billings Index showed an increase in demand for all four sectors it tracks. This is the first time since December 2007 that each of the four sectors the index tracks saw an increase.

The multifamily residential sector had the highest ABI score at 55.9, followed by mixed-use projects at 53.9, commercial and industrial at 52.0 and institutional at 50.5.

This is the seventh straight month the multifamily residential sector has led all scores.

The sector and regional categories are calculated as a three-month moving average, where the national ABI score is calculated monthly.

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