Demand for architectural design hits new low in May: AIA

Demand for architectural design fell to a new yearly low in May. The Architecture Billings Index, which indicates construction volume, decreased slightly to 47.2 last month from 47.6 in April, according to American Institute of Architects data released Thursday. The benchmark for the index is 50. Anything above that indicates an increase in architectural billings and anything below indicates a decrease. The AIA surveys a panel of member firms monthly, asking if billings increased, decreased or stayed the same. The national association then weighs the responses for the index. April was the first month in 2011 the index swung below 50. The continued decline in demand for architectural services is igniting pessimism among industry experts. Kermit Baker, chief economist at AIA, said it will be very difficult for the construction sector to return to normal and increase jobs until the overall economy improves. “Whatever positive momentum there had been seen in late 2010 and earlier this year has disappeared,” Baker said. “There is no denying that the prolonged credit freeze from lenders for financing commercial projects is the No. 1 challenge to a recovery for the design and construction industry.” The new projects inquiry index also experienced a sharp drop in May, falling to 52.6 from 55 a month prior, according to AIA. The regional buildings index was highest in the Northeast at 51.2, followed by the Midwest at 51.1, the South at 48.3, and the West at 47.7. The index was the highest in the multifamily residential sector (53.9) followed by the commercial-industrial sector (49.1), the institutional sector (46.5) and the mixed-practice sector (44.9). Those figures are unchanged from the previous month. Write to Christine Ricciardi.