Demand Drops for Architectural Designs in US

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Demand for design services decreased in April, marking a negative shift for the first time in nine months, according to data from the American Institute of Architects.

The AIA's Architecture Billings Index is a long term indicator of construction spending, since the design spending typically occurs at the front end of a project.

Any score above 50 on the index reflects an increase in billings. In April the index hit 48.6, the lowest since July 2012 and down from 51.9 the month before. The index for new projects inquiry was 58.5, a decrease from 60.1 the prior month, AIA reports.  

"Project approval delays are having an adverse effect on the design and construction industry," AIA chief economist, Kermit Baker, said in the release. 

"But again and again we are hearing that it is extremely difficult to obtain financing to move forward on real estate projects."

When broken into sectors, multi-family residential lead the average index with 52.0, followed by institutional (50.1), commercial / industrial (49.2) and mixed practice (48.6). Regional averages, based on a three-month moving average were: South (52.6), West (50.7), Midwest (49.4), Northeast (48.2).  
 
AIA expects this to be just a short-term dip as new project inquiries continue to be strong.