Underscoring the fragility of the economic recovery, the April AIA’s Architecture Billings Index dipped into negative territory for the first time in nine months. The slump to 48.6 was significant, down from 51.9 in March (any score above 50 indicates positive growth).
“Project approval delays are having an adverse effect on the design and construction industry, but again and again we are hearing that it is extremely difficult to obtain financing to move forward on real estate projects,” said AIA Chief Economist, Kermit Baker, in a statement. “There are other challenges that have prevented a broader recovery that we will examine in the coming months if this negative trajectory continues. However, given that inquiries for new projects continue to be strong, we’re hopeful that this is just a short-term dip.”
Regional indexes reversed recent trends with the South leading at 52.6 followed by the West at 50.7. The Midwest slid into negative billings at 49.4, while the East dragged down the overall average with an index of 48.2. By sector, multi-family residential remained strong at 52.0, while institutional work hovered in positive territory at 50.1. Commercial/industrial (49.2) and mixed-practice (48.6) slumped.
The inquiry index, for possible new projects, remained robust at 58.5.