by Rebecca Walker — July 5, 2010—The Architecture Billings Index (ABI), the American Institute of Architects (AIA) measure of future nonresidential construction activity, fell slightly in May to a score of 45.8, as architecture firms continued to report declining firm billings.
However, there are some areas where business conditions are beginning to rebound, notes AIA. This month firms in the Northeast and firms with a commercial/industrial specialization both posted scores over 50. With the improving conditions comes a decrease in outstanding time for previously invoiced receivables, currently averaging approximately 56 days. In addition, 63 percent of firms expect to collect at least 95 percent of their outstanding receivables.
The ABI declined by just over two and a half points in May, falling to 45.8, the lowest score in three months, indicating that slightly more firms experienced a decline in billings in May than did in April.
While many firms report that they are beginning to see the light at the end of the tunnel, including long-delayed projects that are beginning to move forward and slowly starting to increase staff size, many firms continue to suffer through the worst business conditions they have ever experienced. In particular, difficulties with obtaining financing continue to affect many projects. And while the inquiries score remained above 50 for the tenth month in a row, this continues to be due in large part to the increased competition for projects, and has still not translated to billings growth at architecture firms.
For more information, see the AIA Web site.
