Architecture Firms Downturn in Business

AIA's Architecture Billings Index (ABI) fell sharply in April--the first slowdown in billings at architecture firms since last October, according to AIA's Jennifer Riskus. Business conditions at architecture firms had been slowly improving for the last few months, so it remains unclear if this month's downturn is a bump in the road to recovery, or indicative of a longer-term reversal in the two-quarter recovery in design activity. Courtesy of AIA

Inquiries for new projects remained strong last month. However, another indicator of future design work paints a less optimistic picture. In April, the share of firms reporting that the value of new design contracts had decreased as compared to March levels was equal to the share that reported that the value had increased. In March, significantly more firms reported a net gain in design contracts over the prior month.

The Conference Board's Consumer Confidence Index also increased slightly in April, climbing to 65.4 (1985=100), an increase of 0.6 points from March. The consumer assessment of the current situation has improved for seven consecutive months. Consumer assessment of the short term outlook also improved in April.

On the other hand, the GDP increased by an annual rate of just 1.8 percent in the first quarter of 2011, much lower than the 3.1 percent growth reported for the fourth quarter of 2010. Growth was much lower this time primarily due to a decrease in government spending at all levels: federal, state and local.

- Courtesy of AIA