Economy Slowly Recovering, Inflation Reemerges

 

Billings trends by construction sector concentration hold signs of optimism.
Courtesy of AIA

Commercial/industrial firms have reported gains each month since last July, according to Kermit Baker, Hon. AIA Chief Economist. Residential architecture firms have reported gains each month since last October, although recent gains have been very modest.

The performance of institutional firms–the largest building market for architects–has been mixed. They reported gains from November though January before falling backwards in the past two months.

Even with the weakness in the construction industry, inflation in basic construction commodities is becoming more commonplace. Over the past 12 months there’s been a growing list of materials (in addition to petroleum products) that have recorded double-digit price increases: steel, copper, brass and aluminum.

Recently, these increases in construction materials have been largely offset by declines in construction costs, as contractors have been aggressive in their project bids in an effort to keep their crews employed. However, at some point, contractors will no longer be able to absorb these rising materials costs.

Some architects have to travel further geographically to find the same amount of work. Projects are generally smaller in size and scope, with less margin due to architects reducing fees to ridiculous levels, according to a firm in the Midwest.

– Courtesy of AIA