Architects report contracts are down but new business inquiries are up

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After a welcome uptick in business in February and March, the nation’s architects reported that business was back down slightly in April. 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 Wednesday that its index of ‘work on the boards’ reported by architects was 42.8, down from the 43.7 mark in March. This was the first time since last August and September that the index was above 40 for consecutive months, but the score still indicates an overall decline in demand for design services. The score must go above 50 to indicate an increase in billings.

One the plus side, the April score for new inquiries from clients about possibly starting projects was 56.8.

“The most encouraging part of this news is that this is the second month with very strong inquiries for new projects. A growing number of architecture firms report potential projects arising from federal stimulus funds,” said Kermit Baker, the institute’s chief economist. “Still, too many architects are continuing to report difficult conditions to feel confident that the economic landscape for the construction industry will improve very quickly. What these figures mean is that we could be seeing things turn around over a period of several months.”

-- Roger Vincent