Architecture Billings Index Hits Five-Month Low

Washington, DC, Feb. 24, 2010--The Architecture Billings Index, a leading indicator of U.S. nonresidential construction spending, fell in January to its lowest level since August.

The Architecture Billings Index was down up 2.9 points to 42.5 last month, according to the American Institute of Architects, mostly because construction projects kept getting delayed or canceled.

The index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was in January 2009, when it reached a revised 33.9 level.

"Lending institutions are placing unusually stringent equity requirements on new developments," said AIA Chief Economist Kermit Baker.

"This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects and declining property values," he said.

A measure of inquiries for new projects fell more than 7 points to 52.5, its weakest reading since July.

All four U.S. geographic regions stayed below 50 in billings in January, as did three of the four construction sectors. Billings for apartment buildings, however, rose to 50.1 from a revised 49.3 the month before, suggesting that construction of multifamily dwellings could rebound earlier than other sectors.

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