For architects standing vigil for a sign that the Great Recession might be easing in 2010, macroeconomic conditions indicate it may be so, but that they must be patient. U.S. real GDP rose 5.7 percent in the fourth quarter of 2009, and the unemployment rate declined to 9.7 percent in January. But despite such positive signs, economists who follow patterns in construction predict that the architecture industry might not see a boost until 2011. Why? Tight credit, high unemployment, drastic decreases in tax revenue, and overbuilding are among the reasons. “The tough environment for construction that was present in 2009 will be with us in 2010 as well, even with the pickup in economic growth,” says Robert Murray, vice president of economic affairs at McGraw-Hill Construction [RECORD’s parent company]. While the forecasts are grim, economists and architects alike are seeing smart firms move into markets they might not have been so enthusiastic about before.
MARKET OVERVIEW Just how bad is it? Evidence can be found in the AIA’s Architecture Billings Index, which reflects a nine- to 12-month lag between when an architect bills for a project and when construction spending begins. The ABI was up in December 2009, with a billings score of 43.4, compared to 34.1 in December 2008. But the index has fallen below 50 for 23 straight months; anything above 50 indicates an increase in billings, and below 50, a decrease.
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