Architects see another drop in design contracts

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After a modest uptick in December, the nation’s architects reported a drop in business last month to a historic low. Architectural contracts are a leading indicator of construction activity, with a lag time of about nine months to a year between the awarding of architectural contracts and construction spending.

The American Institute of Architects, the leading trade group for the profession, said today that its index of ‘work on the boards’ reported by architects was 33.3 in January, down from 34.1 in December. The score must rise above 50 to indicate an increase in billings. The West had the best performance in the country with a score of 38.3.

The shortage of credit has made it tough for developers to build even when there is clear demand for their projects, but recently approved federal spending may get the pipeline moving, said Kermit Baker, the institute’s chief economist. “Now that the stimulus bill has passed and includes funding for construction projects, as well as for municipalities to raise bonds, business conditions could improve,” Baker said. ‘That said, until we can get a clearer sense of credit lines being made available by banks, it will be hard to gauge when a lot of projects that have been put on hold can get back online.”

-- Roger Vincent