News Ticker

Architecture Billing Index Downturn Moderates as Negative Conditions Continue

Source: AIA

The Architecture Billings Index (ABI) pointed to a slower decline in July in design activity at U.S. architecture firms. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the July ABI score was 48.7, up considerably from the mark of 45.9 in June. This score reflects a decrease in demand for design services (any score below 50 indicates a decline in billings). The new projects inquiry index was 56.3, up from mark of 54.4 the previous month.

“Even though architecture firm billings nationally were down again in July, the downturn moderated substantially,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “As long as overall economic conditions continue to show improvement, modest declines should shift over to growth in design activity over the coming months.”

Key July ABI highlights:

  • Regional averages: , South (52.7), Midwest (46.7) West (45.3), Northeast (44.3)
  • Sector index breakdown: multi-family residential (51.4), mixed practice (49.1), commercial / industrial (48.4), institutional (46.6)
  • Project inquiries index: 56.3

Original Source: AIA

AZBEX Speaks With Diane Jacobs Holly Street Studio

Comparing the disappointing Architecture Billing Index to a local firm’s perspective often provides a unique contrast.  That can be seen again this month as Rebekah Morris takes ten minutes of Diane Jacobs’ time to discuss what projects Holly Street Studio is working on, and what they see in the marketplace as opportunities and challenges.

Holly Street Studio is busy.  Very busy.  Jacobs explained that their clients are asking them for additional services on unrelated projects throughout the course of their current workload.  She sees clients increased concern for protecting their existing resources and planning for the future, with an eye to adapting what’s currently available for an alternative use.  She also sees clients view items like energy efficiency as an investment, willing to spend more upfront to realize savings in the long run.

When asked about her thoughts on the local economy, Jacobs stated she feels a shift from a ‘make new’ mindset to a more thoughtful one, concerned with fixing resources instead of replacing them.  She is pleased to see a more inward focus, attempting to use untapped resources in new and creative ways.  Much of the firm’s projects on the boards are adaptive reuse type projects.

On the Boards

  • ASU Downtown Campus’ Student Center, a conversion from an old mail facility.  The added scope of a Learning Center opened this week to students for the first time. General Contractor: Caliente Construction.
  • Southwest Center for HIV/AIDS Prevention: an adaptive reuse of the old Channel 12 building in Downtown Phoenix.  Beyond a health clinic, the new space will serve as a community center with amenities such as a theater and vitamin store, in addition to housing administrative and health services functions.  The $2.1M design-build project is led by Hardison-Downey Construction.
  • Hermoso Park Community Center through the City of Phoenix.
  • Internally, Holly Street Studio just completed an expansion of their own, more than doubling their office to over 2,100SF.  This growth is evidence of a sound strategy of strong partnerships with clients, consultants, and General Contractors, coupled with consistently great work.

Challenges in the Market

When pressed about the biggest challenges facing the market today, Jacobs mentioned the climate for public funding: so many of her clients have great projects planned, but they will not move forward unless the November bond election nets a favorable outcome.

Although an unquestionably challenging market, one unexpected consequence according to Jacobs is that clients are much more careful with their needs assessments, more attention is paid to the longevity of a project and how it will impact not just current operations, but future needs as well. Jacobs said it well when stating that Architects must be part of the solution, taking a holistic approach to meeting their needs.