Architecture Billings Index Falls in November

Washington, DC, Dec. 16, 2009--The Architecture Billing Index, a leading indicator of U.S. nonresidential construction spending, fell in November, as continued tight credit pressures demand for design services.

The index fell 3.3 points at 42.8 last month, according to the American Institute of Architects (AIA).

The index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was 33.3 in January.

"Design activity is not heading back into a recovery phase with any rapidity," said AIA Chief Economist Kermit Baker.

Typically, as recession ends and jobs pick up, employers begin to add facilities or rehabilitate existing ones, Baker said. But the process can take years -- after the 2001 recession, billings did not recover until 2004 -- and the current downturn was much more severe than the previous one.

"It took a long time for jobs to come back and therefore a long time for nonresidential construction to come back, too. It was close to three years before we saw significant numbers," Baker said.

A measure of inquiries for new projects held steady at 58.5. This measure has been higher than the billings index for several months, partly reflecting increased competition among architecture firms for the same projects.

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