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West sees design activity drop for first time since July 2012

For the first time in almost two years, design activity is decreasing in the country's western region as the Architecture Billings Index dipped below 50 in the American Institute of Architects’ April report.

The West reported an Architecture Billings Index score of 48.9 last month, down from 50.7 in March and 51.9 in April of last year.

Any score above 50.0 on the Architecture Billings Index indicated an increase in workload and payment for services for architects. The index reflects the approximate nine to 12 months between architecture billings and construction spending.

The West had gone 20 consecutive months, prior to last month, with increased demand for design activity. Only the South region had more in that span with 21 straight months.

July 2012 was the last time West didn’t have an ABI score above 50, when it reported at 47.5.

For the first four months of the year the West has averaged an ABI score of 50.4. Through the same time last year the West averaged 52.4 and in 2012 averaged 46.6.

Last month the West had the second highest ABI score. The South came in first with a mark of 57.5. The Midwest was third at 47.0 and the Northwest came in fourth at 42.9.

Nationally, the Architecture Billings Index has reverted into negative territory for the last two months, after starting 2014 with back-to-back months with increased demand for design activity.

The national ABI score in April was 49.6, up from 48.8 in March, and 48.7 in April of last year.

“Despite an easing in demand for architecture services over the last couple of months, there is a pervading sense of optimism that business conditions are poised to improve as the year moves on,” said Kermit Baker, chief economist for the American Institute of Architects.

Out of the four sectors the Architecture Billings Index tracks, the multifamily industry had the highest demand for design activity with a 52.6 score.

This is the seventh straight month and 10 out of the last 14 months multifamily design has led all sectors. Multifamily is also on a 24-month streak of increased billings.

Commercial and industrial reported a score of 50.2, followed by mixed practice at 50.7 and institutional at 47.1.

The American Institute of Architects added a new indicator last month to its Architecture Billings Index, measuring the trends in new design contracts at architecture firms. It is meant to provide a strong signal of the direction of future architecture billings, according to Baker.

The score for design contracts in April was 54.6, up significantly from March’s score of 48.2.

“With a healthy figure for design contracts this should translate into improved billings in the near future,” Baker said.

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