‘It Can’t Get Any Worse – And Then It Does’ AIA’s Architecture Billings Index Falls Again

Because we’re occasionally stricken with bouts of foolish optimism, we’ve kept expecting that the American Institute of Architect‘s Architecture Billings Index would eventually stop falling and the past six months of stagnation and then heading steadily south was just some sort of crazy fluke that would eventually right itself. But now we’re into July and there’s no good news in that direction. Once again, the Index has moved downward, just shy of a full point below the month before, and there it sits, currently standing at 46.3 (anything above 50 indicates an increase in billings and a general idea of how the building business is faring). All the worse, you know things are lousy when the AIA’s traditionally reserved man of numbers sounds down:

“This seems to be a case of not thinking it can’t get any worse – and then it does,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. “While a modest turn around appeared to be on the way earlier in the year, the overall concern about both domestic and global economies is seeping into design and construction industry and adding yet another element that is preventing recovery. Furthermore, the threat of the federal government failing to resolve the debt ceiling issue is leading to higher borrowing rates for real estate projects and should there actually be a default, we are likely looking at a catastrophic situation for a sector that accounts for more than ten percent of overall GDP.”