Business conditions at design firms in the West did not change in December when compared to the previous month, according to the latest Architecture Billings Index (ABI) released Wednesday by the American Institute of Architects.
The West reported a score of 49.6 last month, the same mark as November. But even with no change in the region's ABI score, demand for architectural service is still decreasing, as any score below 50 signifies a decline in billings.
Greg Rogers, CEO of San Diego-based Pacific Building Group, said last month was fairly busy for his firm, adding that most of the work was in tenant improvement projects for corporate clients.
"A lot of clients wanted to get their projects awarded before the end of the year so construction could start at the beginning of 2013," Rogers said.
In December 2011, the West reported an ABI score of 45.6; and in December 2010, the West was at 48.5.
From August through October 2012, the West saw a three-month stretch in which demand for design services was rising. The last time this happened was in August 2007, when the West was ending 14 straight months of increased demand for architectural services.
The average ABI for the West in 2012 was 48.4. In 2011, the West had an average score of 47.4 and in 2010 it was 45.1.
"2012, was certainly better than 2011," Rogers said. "I think it was still slow for a number of people and sectors that perform new construction." He added that remodeling work and the manufacturing and health care sectors were the busier ones in 2012.
The ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.
For the second month in a row, the West was the only region in the country that did not see billings increase. The Midwest had the highest ABI score at 55.7, the second month in a row the region topped the index; followed by the Northeast at 53.1; and the South with 51.2.
Collectively, the United States continues to see demand for design services rise, but at a slower pace. The national ABI score was 52.0 last month, down slightly from November's mark of 53.2. This is the fifth month in a row that the index was over 50.
In December of last year, the national ABI was 61.5. The average national ABI score for 2012 was 57.8.
"While it's not an across-the-board recovery, we are hearing a much more positive outlook in terms of demand for design services," said Kermit Baker, AIA chief economist. "Moving into 2013 we are expecting this trend to continue and conditions improve at a slow and steady rate. That said, we remain concerned that continued uncertainty over the outcomes of budget sequestration and the debt ceiling could impact further economic growth."
All four sectors the ABI tracks were in the green and had increased design demand. The commercial and industrial sector had the highest mark -- 53.4, followed by mixed-use at 53.0, institutional at 50.9, and multifamily residential at 50.5. The last three months of 2012 were the only months in the year where billings increased among the four sectors.