Demand for Design Services Declines in Midwest
After five consecutive months of growth, demand for design services declined in the Midwest in November, according to data compiled by Washington, D.C.-based American Institute of Architects.
AIA's Architecture Billings Index, reflecting the nine- to 12-month lead time between billings and construction spending, reported a near five point slide for the region, from 54.4 to 49.8, between October and November. Scores above 50 denote an increase in billings.
By comparison, the South extended its growth streak to six months, though billings dipped modestly, from 58.4 to 57.9, for the same period. The West likewise logged its six consecutive month of growth, though demand slowed more precipitously there, from 56.1 to 42.7.
The Northeast remained mired in negative territory for a third consecutive month, with a point drop of
.03, to 46.7.
Despite across-the-board declines among regions, all project sectors maintained growth in November. The multi-family residential sectors (56.8) posted greatest growth, followed by mixed practice (52.6), institutional (51.3) and commercial /industrial. (50.6).
“Demand for design services has slowed somewhat from the torrid pace of the summer, but all project sectors are seeing at least modest growth,” says AIA Chief Economist Kermit Baker. “Architecture firms are expecting solid mid-single digit gains in revenue for 2014, but heading into 2015 they are concerned with finding quality contractors for projects, coping with volatile construction materials costs and with finding qualified architecture staff for their firms.”
Earlier this year, Arlington, Va.-based Associated General Contractors of America issued a study indicating 2 million construction laborers lost jobs during the nation's economic downturn, many of whom subsequently secured employment in oil, gas and trucking. Although shortages are most acute in the Southeast, where 86% of contractors indicated difficulty locating qualified workers, it is followed by the Midwest, where 82% of contractors indicated similar difficulties.