AIA ABI Index reading for April 2011 was below 50; that’s not a good sign
Found on Reuters.com this morning….
* April billings (AIA ABI) index 47.6, down 2.9 pts
* New project inquiries index 55.0, down 3.7 pts
* Financing an obstacle to recovery: AIA
By Nick Zieminski (Reuters.com)
NEW YORK, May 18 (Reuters) - A leading indicator of U.S. construction activity fell in April, hurt by tight financing for projects, suggesting a hoped-for construction recovery may be delayed, an architects' trade group said on Wednesday.
The architecture billings index fell almost 3 points last month to 47.6, a level that indicates declining demand for architecture services, according to the American Institute of Architects (AIA).
The AIA's index is considered a predictor of nonresidential construction trends nine to 12 months in the future.
A separate index of inquiries for new projects fell 3.7 points to 55.0, but remains above the 50 mark that indicates expansion. This measure is typically higher than the billings index because construction clients contact multiple architects about future projects.
The declines may not indicate a wide reversal in demand since April included unusual factors, like the threat of a U.S. government shutdown and destructive storms, the trade group said. However, funding for construction projects remains an obstacle as large lenders are reluctant to fund projects.
"The majority of firms are reporting at least one stalled project in-house because of the continued difficulty in obtaining financing," said AIA Chief Economist Kermit Baker. "That issue continues to be the main roadblock to recovery, and is unlikely to be resolved in the immediate future."
Joel’s comments:
Same question I posed last month when I commented on the more recent AIA ABI Index readings…. when will we begin to really see a real rebound in the Architecture industry?
AIA ABI Index, recent “readings”:
47.6 – April 2011
50.5 – March 2011
50.6 – February 2011
50.0 – January 2011
54.2 – December 2010
52.0 – November 2010
48.7 – October 2010
50.4 – September 2010
Prior to September 2010, the ABI Index had not been at 50 or above since December 2007.
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