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AIA Architects Report Slower Billings

Business conditions at architecture firms ended the year on another sour note, with steep billings declines and ongoing weakness in inquiries for new projects.

Architects participating in the American Institute of Architects' (AIA) Work-On-the-Boards survey said their billings declined again in December. The AIA's Architectural Billings Index (ABI) was 36.4 in December. The November ABI was 34.7.

After a score of 50.7 in January 2008, the ABI was below 50 every month of the year, reflecting the national billings decline experienced every month after January. Most of the declines were fairly significant, with four monthly readings below 40, including the last three of the year.

The index for inquiries for new projects was almost as pessimistic, as readings for the last three months of 2008 all were below 40.

According to an article posted on by Kermit Baker, AIA's chief economist, business levels at commercial/industrial firms have turned down dramatically in recent months, while conditions at institutional firms are just beginning to soften. Residential firms have been mired in a downturn for several years.

Given the magnitude of the national economic downturn, firms in all regions are reporting very weak conditions. Most firms are expecting conditions to remain weak throughout the year, as almost a third of firms are expecting further downsizing before the end of 2009.

“The inability to get financing for construction projects is a key reason that business conditions continue to be so poor at design firms,” said Baker. “It will be important to see what the proposed economic stimulus package includes that is geared toward the construction industry, and how quickly developers who have had to put projects on hold can get them moving again.”

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