Architectural firms in the West region saw a slower decline in design activity last month as demand for services continue to decrease, according to the latest Architecture Billings Index released last week.
The West reported an Architecture Billings Index of 45.3 in July, a slight increase from June’s mark of 44.3. In July of last year, the West posted a score of 46.6.
The ABI reflects the approximate nine- to 12-month lag time between architecture billings and construction spending.
Any score on the index below 50 indicates a drop in payments to architectural firms surveyed by the American Institute of Architects, which releases the ABI report every month.
This is the 13th straight month that the West region has seen design activity diminish. There have been only two months in the past 42 months that the West has seen a score greater than 50, in March and June 2011.
Most of the design activity in San Diego County is coming from the public sector, with various school districts spending construction bond money, and close to $1 billion in highway and public transportation projects scheduled to come online in the next 18 months.
In addition, the Department of Defense is expected to spend $492 million on construction projects for the Navy and Marine Corps in the Southwest region in fiscal year 2013.
But some architects say San Diego isn’t faring as poorly as the West as a whole, and believe the private sector is ready to bounce back and improve the architectural industry.
“It’s an interesting time because the private world is awakening from its long sleep,” Norman Strong, principal at Miller Hull Partnership LLP, said. “They are now looking into hiring firms to develop feasibility studies and master-planned communities. The private side is going to be starting to pick up big time.”
Rachel Inmon, project director for LPA Inc., also believes the design industry is getting healthier, and said she recently has seen an increase in requests for proposals and requests for quotations in both the public and private sectors.
“In the last few months, we are seeing interest grow from companies that want to move from Class B office space to Class A space, and that is leading to interior remodeling and renovation design work,” Inmon said. “Or companies want to stay in the same place but just expand their current space.”
Nationwide, the ABI also pointed to a slower decline in design activity in July. Last month, U.S. firms that were surveyed recorded a score of 48.7, up from 45.9 in June and marking the fourth straight month of a score below 50 after reporting scores of more than 50 for five consecutive months. July 2011's ABI score was 45.9.
“Even though architecture firm billings nationally were down again in July, the downturn (has) moderated substantially,” said Kermit Baker, chief economist for the American Institute of Architects. “As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months.”
The South was the only region that posted a score above 50, with a 52.7 mark. This is the sixth time in the last year that the South has recorded a score greater than 50.
The Northeast reported the lowest index score with a mark of 44.3; and the Midwest came in with the second highest at 46.7.
In the last 12 months, the Midwest has had a score above 50 seven times, and the Northeast six times.
Multifamily residential was the only sector that scored above 50 with a mark of 51.4. The mixed-practice sector came in at 49.1, followed by commercial and industrial with a 48.4 score and institutional at 46.6.