After five straight months where the American Institute of Architects’ Architecture Billings Index reported growth for the design and construction professions, April’s numbers report mild contraction, a disappointment for many who were hoping that the economic recovery had finally caught some steam and that growth, moderate though it has been, would continue through the spring and summer. April’s score was 48.4, beneath the metric’s growth threshold number of 50. (March’s billings score was 50.4.)
April’s project inquiry index also dipped to 54.4, from March’s 56.6. This does still mean growth in inquiries for architectural work, just at a lower level than the profession has seen since September 2011. (The project inquiries index has come in above 50 every month since February 2009—that’s 39 straight months.)
This drop in billings could be an aberration, or it could be a market correction caused by a mild hangover from the unseasonably warm winter. Some have argued that this would happen, saying essentially that work which would have been done this spring was instead performed over the winter because there were no harsh conditions to prevent doing so (i.e., firms didn’t need to wait for snow to melt before beginning construction). They would say that now there is a lag in production and work because we didn’t really witness an excess of demand over the past six months, just work that was performed earlier than expected. Others have opined that applying historical trends in this way to our current economic situation doesn’t apply, and that instead, we are in a unique situation due to the long, jobless recession and the extraordinary actions taken by the Federal Reserve and federal government over the past few years, in addition to the continuing output gap and accompanying buildup of demand. One data point does not make a trend, though, and it is too early to prove or refute either story.
The score for all four industry sectors is down in April, although half of those remain in growth territory. And three of the four regions of the country also saw their billings score decrease. Only the West region defied this condition.
Multifamily Residential: 50.5
Mixed Practice: 45.0
(The regional and sector categories are calculated as a three-month moving average, whereas the index and inquiries are monthly numbers.)
Check out charts for the national billings and projects inquiries, as well as the regional and sector indexes, below.