AIA ABI Index for April 2011 slips below 50 for first time in past 7 months (Part 2)

We did a post on May 18^th about the AIA ABI Index reading for April 2011, so today’s post is a follow-on post to the post we did yesterday.

Here’s the formal statement from the AIA about the AIA ABI Index reading for April 2011

Architecture Firms Report a Downturn in Business Conditions in April (2011)

By Jennifer Riskus -- Manager, Economic Research (AIA)

The AIA’s Architecture Billings Index (ABI) fell sharply in April (2011)--the first slowdown in billings at architecture firms since last October. Business conditions at architecture firms had been slowly improving for the last few months, so it remains unclear if this month’s downturn is a bump in the road to recovery, or indicative of a longer-term reversal in the two-quarter recovery in design activity. Firms reported that the threatened federal government shutdown, tornadoes though the Southeast, and the winding down of federal stimulus funds for building activity all were impediments to design activity in April.

Inquiries for new projects remained strong last month. However, another indicator of future design work paints a less optimistic picture. In April, the share of firms reporting that the value of new design contracts had decreased as compared to March levels was equal to the share that reported that the value had increased. In March, significantly more firms reported a net gain in design contracts over the prior month.

Weak billings in the West and natural disasters in the South

Business conditions at architecture firms located in the Northeast and Midwest regions of the country continued to improve in April, but firm billings weakened at firms in the South and West regions. Firms in the West have still not emerged from the economic downturn, while firms in the South had reported some improvement earlier this year, but have weakened in recent months. However, some firms in the South reported that an uptick in work may be coming in due to the need to rebuild from the recent tornados and storms. The current flooding along the Mississippi River basin may also necessitate future reconstruction activity.

Firms that have an institutional specialization, as well as those with a commercial/industrial specialization, had a fairly significant slowdown in their ABI scores in April. Business conditions remain particularly weak for institutional firms, despite indications of some growth in late 2010 and early 2011. Firms with a residential specialization continued to do relatively well in April, posting their seventh consecutive month of billings growth, reflecting improvement in multifamily design activity.

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Also, there are further comments about the AIA ABI Index for April on the web-site known as “EconIntersect”.

Here’s the tittle of the article that’s on that web-site:

Architectural Billings Tumble

And, here’s the Internet address of that article:

http://econintersect.com/b2evolution/blog1.php/2011/05/18/architectural-billings-tumble