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West sees demand for design activity inch up in March

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The West saw a minimal gain in demand for design activity as the region stays in positive territory for the 20th consecutive month, according to the latest American Institute of Architects’ Architecture Billings Index.

The West reported an ABI score of 50.7 in March, up from 50.5 in February.

The index reflects the approximate nine to 12 months between architecture billings and construction spending. A score of more than 50 indicates an increase in workload and payment for services.

The West has averaged an ABI score of 50.9 in the first quarter of 2014, compared to 51.8 for the same period last year.

The West has had design activity increase over the last 20 months, averaging a score of 52.4, higher than the national average of 51.6 and second only to the South region (52.6) during this period.

Last month the South held the top spot once again, beating out the other three regions with an ABI score of 52.8. The Northeast came in third at 46.8 and the Midwest was just behind with a mark of 46.6.

The national average again turned negative in March following a modest two-month recovery. The national ABI score last month was 48.8, down from 50.7 in February and 50.4 in January.

Kermit Baker, chief economist for the American Institute of Architects, said this prolonged softening in design activity is a bit of a surprise given the overall strength of the market over the last year and a half.

“Hopefully, some of this can be attributed to severe weather conditions over this past winter,” Baker said. “We will have a better sense if there is a reason for more serious concern over the next couple of months.”

Out of the four sectors the ABI tracks, the multifamily industry had the highest demand for design activity with a 52.1 score. This is the sixth straight month and nine out of the last 13 months multifamily design has led all sectors. Multifamily is also on a 23-month streak of increased billings.

Commercial and industrial reported a score of 49.6 last month, followed by institutional at 49.0 and mixed practice at 47.6.

The American Institute of Architects added to its Architecture Billings Index this month an indicator that measures the trends in new design contracts at architecture firms. This is meant to provide a signal of the direction of future architecture billings, according to Baker.

The score for design contracts in March was 48.2.

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