Posts tagged with "The Economy":

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Architecture Billings Index Dips for Second Month. Is the Recovery Slowing?

Following a period of extended growth, the Architecture Billings Index (ABI), which is compiled by the AIA, declined for the second straight month, down to 48.5 in December from 49.8 in November (any score below 50 indicates a decline). The news is not entirely bleak, however, as new project inquiries rose to 59.2 up from 57.8. The regional breakdown reflects a reversal of fortunes during the recovery. The Northeast, long the leading region for the ABI, is now trailing the other three regions, with a paltry score of only 42.8. The long suffering West now leads at 53.2, followed by the South at 51.2. The Midwest is also mired in negative territory at 47.0. By sector, multi-family residential leads at 53.8, mixed practice follows at 51.0, commercial/industrial at 47.1, and institutional work trails at 44.8. AIA chief economist made a cautionary statement: "What we thought last month was an isolated dip now bears closer examination to see what is causing the slowdown in demand for architectural services." Stay tuned.
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Indianapolis Moves to Privatize Parks

Indianapolis’ public parks system, Indy Parks, is looking for third parties interested in privatizing some or all of the city’s parks and recreation holdings. The move follows last year’s survey seeking ways to upgrade the city’s 207 parks properties. With a $46 million backlog of needed improvements and just $3.4 million available in the annual budget, Indy Parks could use some help. Deputy Director Jen Pittman told Indianapolis Business Journal the agency’s aware that the request for proposals, issued in November, is broad: “We wanted to cast a wide net to engage the creativity of the community … We’re looking for proposals that will take our parks from good to great.” Any deals larger than $25,000 must be approved by the city-county Council, but the parks board can handle smaller sponsorship agreements itself. Parks board members are appointed by the mayor and members of the City-County Council. One candidate for private operation is the 50-acre World Sports Park, currently under construction. Five multi-use fields at 1313 South Post Road would host cricket and other international sports. Its $6 million price tag is the subject of controversy. Indiana is no stranger to privatization. Indy Parks’ golf courses are already privately operated, as is its Major Taylor Velodrome complex. Nashville, too, has sought private bids to help sponsor its public parks system. Partnership proposals must be in by Jan. 31, 2014.
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October Architecture Billings Slow After Months of Strong Figures

After a three-month streak of positive growth, the Architecture Billings Index revealed a small dip in the demand for design services. The ABI score slid down from 54.3 in September to 51.6 in October (any score above 50 indicates an increase). AIA Chief Economist Kermit Baker said that the tumultous political climate—read Government Shutdown—contributed to the drop in activity last month. “There continues to be a lot of uncertainty surrounding the overall U.S. economic outlook and therefore in the demand for nonresidential facilities, which often translates into slower progress on new building projects,” said Baker. “That is particularly true when you factor in the federal government shutdown that delayed many projects that were in the planning or design phases.” October was a month of mixed results for architects across the country. Numbers rose slightly in the the South, jumping from 54.1 in September up to 54.4 in October. The Midwest also came out strong climbing to 51.6 from 51. The West, though, took a bit of a nosedive, falling from 60.6 to 55.9. The Northeast (49.7) also didn't fare quite as well as the previous month. There was a surge of multi-family and residential projects last month. The sector climbed up a couple of points from 55.6 to 57. Meanwhile figures showed a decline for the other sectors: commercial/industrial (53.7), mixed practice (53.2), and institutional (50.2). The rise in new projects inquiry, however, bodes well for the future—moving from 58.6 to 61.5 last month.
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Urban Land Institute’s 2014 outlook: ‘recovering from the recovery’

ULI At its annual fall meeting (this year in Chicago), the real estate research non-profit Urban Land Institute released its 2014 trends report Thursday. The verdict of the 1,000 professionals surveyed? Next year we will continue “recovering from the recovery,” in the words of one respondent, following the depths of the 2008 recession. The Emerging Trends in Real Estate report (download the full report here) asked 1,000 individuals—mostly property investors and developers, but also banks, lenders and homebuilders—to forecast the coming year in the real estate industry. The report, ULI’s 35th annual, dubbed this coming year the first of the “middle innings” of the economic recovery. Banks are again comfortable with real estate, ULI’s Stephen Blank said, having repaired balance sheets damaged by the financial collapse. There’s money to be made, the report said, in secondary markets (including many of the same cities we associate with the foreclosure crisis—Las Vegas, Atlanta, etc.). Secondary property types are also heating up, the report said, such as rentals of single-family homes. Of the report’s "U.S. markets to watch" list, the top slots go to San Francisco, Houston, San Jose, New York City, and Dallas/Fort Worth. At the bottom of the list are Detroit, Providence, RI, and Cleveland. But while some investors and lenders are loosening their grip on the purse strings, that doesn’t mean property owners are ready to sell. ULI’s Andrew Warren points out demand for warehouse and industrial spaces, for example, has soared, with more than 60 percent of survey respondents expressing interest. But fewer than 10 percent said they wanted to sell. Similar discrepancies exist in other sectors, which could drive prices over the next year. It seems despite the increasing momentum, property owners are still largely content to hold on to what they've got.
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Los Angeles Coliseum and Other REALLY Important RFPs in SoCAL

The architecture business seems to be—slowly—rounding back into form in Southern California. One indicator? A bunch of Requests for Proposals (RFPs) and Requests for Qualifications (RFQs) for major public projects. One of the most significant is the $70 million renovation of the Los Angeles Memorial Coliseum, whose management was taken over by the University of Southern California (USC) this summer. The iconic Parkinson & Parkinson–designed building will undergo long-delayed updates throughout, including improved sight lines, seating, concessions, audio/visual, lighting, restrooms, and much more. The stadium's last major upgrade came in 1993. The shortlist for the project for now includes Populous, NBBJ, DLR, HNTB, Gensler, and 360 Architecture. The West Hollywood Park Master Plan, to devise a new 70,000 square foot recreation center adjacent to  Johnson Favaro's new West Hollywood Library, has a shortlist that includes recent AIA/LA Gold Medal winner Frederick Fisher and Partners with CMG and Buro Happold, Langdon Wilson, and a mystery team that we're still trying to ascertain.  For the Long Beach Civic Center, which includes a commission for  a new city hall, main library, and the revitalization of Lincoln Park, the shortlist includes architecture teams led by Fentress, SOM, and Pei Cobb Freed.  Stay tuned as we learn the fates of all of these projects.
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September Billings Report Show Steady Positive Growth for Architecture Economy

The slow days of the recession are long gone. Recent figures indicate that September was another robust month for the architecture industry. The Architecture Billings Index (ABI) rose from 53.8 in August to 54.3 (any score above 50 indicates an increase in billings).  AIA Chief Economist Kermit Baker said that this upswing in the demand for design services is a reflection of the industry's new and advanced design and business practices. “The prolonged economic downturn that has affected the design and construction industry has actually resulted in the increased productivity levels as reported by architecture firms,” Baker said. “In addition to new approaches to business challenges, a very competitive marketplace, the utilization of new technologies, and a renewed focus on efficiency have architecture firms realizing all-time highs in workplace productivity, and these new efficiencies can greatly benefit clients from a project timeline and budget standpoint,” continued Baker. Some regions fared better than others last month. The West came out strong, jumping nearly 6 points from 54.8 to 60.6. The South also showed positive growth increasing from 51.9 to 54.1. The Midwest dipped down to 51 from 52.8, and the Northeast also slipped several points from 54.4 to 50.7. The commercial/industrial and multi-family sectors have been busier than usual. The former spiking up several points to 57.9 from 54.8, and the latter climbing to 55.6 from 52.1. Mixed practice, however, tumbled down to 55.4, and institutional projects experienced a slight drop from 50.8 to 50.4. For the second month in a row the project inquiries index has taken a dive, falling from 63 to 58.6.
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Summer Continues to Soar with Strong August Billings Report

Recent economic figures from the Architecture Billings Index (ABI) revealed that summer finished on a high note with a significant rise in the demand for design services. The ABI score for the month of August jumped more than a full point from July climbing up to 53.8 from 52.7 (any score above 50 indicates positive growth). AIA Chief Economist, Kermit Baker, sees positive growth for the industry, but remains cautious about the future. “As business conditions at architecture firms have improved eleven out of the past twelve months, it is fair to say that the design professions are in a recovery mode,” Baker said.  “This upturn signals an impending turnaround in nonresidential construction activity, but a key component to maintaining this momentum is the ability of businesses to obtain financing for real estate projects, and for a resolution to the federal government budget and debt ceiling impasse.” All three regions except for the South experienced an upswing in billings. Numbers for the West (54.8) rose sharply by more than three points from July. The Midwest also made considerable improvement, jumping from 50.8 the previous month to 52.8 in August. The Northeast (54.4) remained steady, increasing by just a smidgen. The South (51.9), however, didn't fare as well falling by more than two points. All in all, the different sectors came out strong. The numbers for mixed practice indicated strong progress, surging from 56.9 to 60.1 in August. Commercial/Industrial (54.8) and Institutional (50.8) sectors remain in good shape, whereas, multi-family residential dropped down to 52.1 from 53.3 in July. Even as the ABI score shows signs of improvement in the industry, unfortunately, the project inquiries tumbled from 66.4 in July to 63.0 in August.
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July Architecture Billings Going Strong as Average Compensation Stagnates

Summer isn't slowing the demand for design services, according to the AIA's latest economic figures. In fact, numbers are on the rise. The AIA's Architecture Billings Index (ABI) for July increased more than a full point spike in non-residential construction activity from June's ABI score of 51.6 to 52.7 (any score above 50 indicates positive growth). Most notably, the new projects inquiry index produced positive results with a substantial increase from 62.6 the previous month to 66.7 in July. While numbers lapsed in most regions in July, the Midwest came out strong climbing to 50.8 from 48.3 in June. The Northeast fell more than a point from 55.6 in June to 54.3. The West slipped ever-so-slightly from 51.2 to 51.1. And the South dropped to 54.2. Mixed practice was the only sector to pull through and show significant progress shooting up more than four points to 56.9 in July. The other industry sectors experienced a small decline: commercial / industrial (54.2), multi-family residential (53.3), institutional (50.6). “There continues to be encouraging signs that the design and construction industry continues to improve,” said AIA Chief Economist, Kermit Baker, in a statement. “But we also hear a wide mix of business conditions all over the country, ranging from outstanding and booming to slowly improving to flat. In fact, plenty of architecture firms are reporting very weak business conditions as well, so it is premature to declare the entire sector has entered an expansion phase.” In spite of the industry's promising growth, the same positive trend has not been reflected in the compensation for architecture positions. AIA published its recent compensation survey, revealing minimal change in salaries since the recession in 2008. "Between 2011 and 2013, average total compensation for architecture positions—including base salary, overtime, bonuses, and incentive compensation—increased only slightly over one percent per year, barely more than the average increase in compensation between 2008 and 2011, when the construction sector was still in steep decline," the report read.
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June Architecture Billings Index Show Numbers Are Still on the Rise

Numbers are staying strong. AIA's Architecture Billing Index for the month of June has revealed steady, but positive growth. The June ABI score of 51.6 reflected only a slight drop from May's score of 52.9, and still indicates a general upswing for the non-residential construction industry. More projects will likely be on the horizon. The new projects inquiry index reported a significant climb in numbers to 62.6 from 59.1 the previous month. “With steady demand for design work in all major nonresidential building categories, the construction sector seems to be stabilizing,” said AIA Chief Economist, Kermit Baker, in a statement.  “Threats to a sustained recovery include construction costs and labor availability, inability to access financing for real estate projects, and possible adverse effects in the coming months from sequestration and the looming federal debt ceiling debate.” Across the country, the numbers were generally up with the exception of the West, which experienced a slight dip to 51.2 from 52.1 in May. It was, however, a particularly robust month for the Northeast which came out with a score of 55.6. The South also finished strong with an uptick to 54.8 from 50.9 last month in June. And even the Midwest saw progress with a score of 48.3. All sectors remain on solid footing but institutional has slowed down a smidgen: commercial / industrial (54.7), multi-family residential (54.0), mixed practice (52.4), institutional (51.8).
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Q+A> Francisco Mangado on Spain’s Foreboding Changes For Architects

At the AIA’s National Convention in Denver, held from June 19–22, AN’s Emily Hooper sat down with Spanish architect Francisco Mangado, who was in attendance to receive an honorary fellowship. Mangado discussed foreboding amendments to Spain’s law of professional services that would allow engineers, or anyone deemed “competent” in construction, to design and erect buildings across the nation. The law was introduced at a council meeting of Government Ministers in April of 2013, and a final pass-or-fail decision will be reached by the end of this year. Mangado: At the moment, we are very concerned about this. There are important demonstrations in Spain against this amendment because the government wants to change the law and allow engineers to do buildings. Right now, only the architect has the capacity to design and build buildings. But now the government, in a very very wrong way I think, [has proposed this and] there is no correspondence with the kind of training of architects and engineers receive in school, to extend the possibility to design and make architecture. Of course we are complaining, not only for a professional questioning, but for cultural and conceptual consideration. Architecture is not only construction. It has to do with the city, with the values of the citizen, with the public space, with beauty, with historical and symbolic concepts, but engineers don't manage these. In the same way that I'm not prepared to make a bridge, I think the government has to realize engineers aren't prepared to design buildings. Right now we are organizing a lot of complaints. After the summer I think the country’s students of architecture will go out to the streets to demonstrate and defend the profession, even with very violent demonstrations because it’s the only way our government will understand these things. We have a government that’s a disaster. The crisis is terrible but this government is increasing that crisis. So the problem of Spain is not only this government; the former government—of socialism—was another disaster. And the conservatives are just another. So the problem of Spain is our politicians. We have a very intelligent country of people who are well prepared with the capacity to work but we have a cancer—which is called politicians. They don’t accept anything. They don’t understand anything. I studied economic science before studying architecture; I know what it means to make an economy. An economy is a very important political component. Economy doesn’t mean you manage a society as if we were just a number in a computer. It’s much more. What is happening with architecture is just another sign of how wrong they are. But we have confidence in the citizens that we will defend our position. My family created an architecture and society foundation that at the moment is considered the most important architecture institution in Spain. Because the social architectural association went bankrupt from the crisis, our association has assumed the role of organizing conferences, lectures, and defending architecture in this sense against the government. If it’s necessary to be in the street, with protest, with violence, we will be there defending architecture. AN: So, this law is an economic measure. Mangado: Exactly. They are making this because they think they are going to reevaluate the cost for doing architecture. The reasoning is the more people they have doing architecture, the less the fees. But it’s completely wrong. At the moment in Spain, there are 40,000 architects and another 40,000 students of architecture, waiting to become architects. With this enormous amount of architects they already have competition. Architecture is a relationship with society. We are making buildings to serve a society, so architects have to be keen on these kinds of questions. What also happened is the government has made the most of the academic schedule in order to prepare this law because they know that 40,000 students are on vacation and they know if these students were at university now, tomorrow they’d have 40,000 young people on the streets.    
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AIA Billings Dip Into Negative Territory For First Time in Nine Months

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.
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Architecture Billings Index Fluctuates Downward, But Still Positive

The Architecture Billings Index has reported a slight fluctuation in design activity over the past few months, recording a score of 51.9 for March, a 3 point decrease from February’s mark of 54.9. Any score above 50 indicates positive growth. All four regions were in positive territory with the Northeast leading at 54.6, the Midwest at 53.9, the South not far behind at 53.6, and the West finishing with a 51.9. Inquiries for new projects came in at 60.1. “Business conditions in the construction industry have generally been improving over the last several months,” said AIA Chief Economist, Kermit Baker, in a statement. “But as we have continued to report, the recovery has been uneven across the major construction sectors so it’s not a big surprise that there was some easing in the pace of growth in March compared to previous months.” By sector, all areas remained in positive territory: Multi-family residential scored the highest at 56.9, commercial/industrial scored a 53.5, mixed practice followed with a 53.3, and institutional came in last but stayed positive at 50.6.