Volume 47, Issue 10 - October 2012
Decline in Architecture Billings Index
Slows During July
The ABI reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending. The July ABI score was 48.7, up from 45.9 in June. Though the number is up from June, the AIA reports that any score below 50 indicates a decline in billings.
The new projects inquiry index, however, was 56.3, up from mark of 54.4 the previous month.
“Even though architecture firm billings nationally were down again in July, the downturn moderated substantially,” says AIA chief economist Kermit Baker. “As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months.”
AAI Motions for Authorization of Asset Sale
According to the motion, the company had a backlog of approximately 13 subcontracts, with revenues in excess of $29 million, at the time of the bankruptcy filing. Some of the projects have been completed, leaving some “that have work to be performed and will be available for sale at the auction.” Among these is a $7.1 million project at Carnegie 57 in New York; a $3.9 million project at One World Trade Center; a $15.4 million on the Cablenet at One World Trade Center; a $3.8 million project at World Trade Center Tower 4; and a $685,000 project on the World Trade Center Path Hall Elevator.
Company officials said the only items not up for sale are its cash, pre-petition litigation claims, and claims under Chapter 5 of the bankruptcy code.
At press time, the court had not yet ruled on AAI’s motion.
Although the nation rebounded from the recession in 2009, the firms’ gross revenue has held a 40-percent decline for the past three years. In 2008, architecture firms pulled in $44 billion but declined to $26 billion by 2011, according to the report. Construction spending levels also took a hit in 2011 and fell below $800 billion in comparison to 2008 when spending levels were $1 trillion.
Between 2007 and 2011, more than 28 percent of positions at architecture firms had been cut, thus taking away the 18 percent increase in architecture positions in the 2003-2007 period, according to the survey.
Dodge Momentum Index Falls in August
Still, McGraw-Hill reports that the index remains 21.4 percent ahead of its level a year earlier.
When looking at specific segments of the market, the commercial component of the index dropped 3.5 percent in August, while the institutional building segment rose 1 percent over the previous month.