Hints of construction recovery as architects get more contracts

November 22, 2009|By Roger Vincent | Los Angeles Times

After more than a year of meager activity, the nation's architects reported a growing number of new contracts in October from builders preparing to get real estate developments off the ground.

It was the highest level of new business for the nation's architects since August 2008, a report from the American Institute of Architects says.

"This news could prove to be an early signal toward a recovery for the design and construction industry," said Kermit Baker, the AIA's chief economist.

The architects' survey is a leading indicator of construction activity because there is a nine- to 12-month lead between when they start work on designs and when builders actually break ground.

The AIA, the leading trade group for the profession, said in a report released last week that its index of "work on the boards" reported by architects was up sharply in September but new commissions still remained far below mid-decade highs.

"The industry is nearing a bottom and might start pulling out in the next quarter or so," Baker said. "We are months away from a substantial upturn in construction activity, but this is the first sign in place for that to turn around."

The report examined architectural billings, which are considered a meaningful indicator of future development activity because builders are loath to spend money on design unless they are sure their projects are going to go forward, Baker said.

The bulk of new designs were for institutional developments such as schools, government buildings and health care facilities. "That's one sector that has benefited from federal stimulus money," he said.

The next-largest category was designs for multifamily residential developments such as apartment buildings, followed more distantly by plans for commercial properties.

Baker said the activity was noteworthy but cautioned that slow times weren't over.

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