Architecture Billings Index Falls in May

Washington, DC, June 23, 2010--The Architecture Billings Index, a leading indicator of U.S. nonresidential construction spending, fell in May after three months of gains, according to the American Institute of Architects.

The index was down 2.6 points to 45.8 last month, after reaching its highest level since January 2008. A measure of inquiries for new projects fell 4.1 points to 55.5.

Readings above 50 indicate expansion, while those below 50 to declining demand. May's results were a surprise, since earlier readings had pointed to recovery, said AIA Chief Economist Kermit Baker.

"The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects," Baker said.

Of four U.S. geographic regions, only the Northeast was above 50 in May, and only the commercial/industrial sector stood above that mark.

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