Notes from the AIA: Tepid Outlook for 2011


Recent AIA billings report.

Yesterday we attended a sobering panel at the AIA convention entitled The Construction Outlook: Implications for Architecture Firms. Presented by the AIA’s Chief Economist Kermit Baker and McGraw-Hill Construction’s Vice President of Economic Affairs Robert Murray, the panel crystallized the problems that continue to plague the architecture profession. In short, while the downturn has ended, the upturn, which is indeed inching along, is coming along VERY slowly, or as Murray put it, we’re facing “an extended bottom.” Projected 2011 growth for U.S. construction starts is 1%, according to McGraw-Hill Construction. The high points are multi-family housing, which are projected to see a 22% gain, Manufacturing building, which could see a 24% gain, and commercial building, which is set to see an 11% jump. Other high points include urban infill, adaptive reuse, renovations, and sustainable design. Perhaps the biggest loser in the coming year will be public work, which is seeing cuts across the board due to debt issues. The AIA’s Billing Index has edged just barely into slightly positive territory after three years of steady declines, said Baker.

But overall the losses sustained over the last few years have been, as Baker put it, “monumental.” Since 2009, he said, firms have cut about 30 percent of their pay-rolled employees, and that doesn’t even include firms that have cut staff to part time or instituted furloughs. Firms are starting to hire contract employees, but still seem hesitant to hire full time staff, he said. “The industry is slowly, gradually recovering,” said Murray. Or as Baker put it: “The upturn is going to be a good deal slower than the downturn.”

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