WASHINGTON, DC-After three straight months of improvement, theArchitecture Billings Index fell nearly three points for the monthof May. The news is a disappointment to the construction industry,as the American Institute of Architects’ ABI is a leadingindicator, reflecting the approximate nine- to 12-month lag timebetween architecture billings and construction spending.

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AIR reported the May ABI rating was 45.8, down substantiallyfrom a reading of 48.4 the previous month. The newprojects inquiry index was 55.5.

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"This dip is somewhat of a surprise since it appeared thatconditions were pointing towards a recovery," said AIA ChiefEconomist Kermit Baker, in a statement. "The overriding issueaffecting the entire real estate sector is unusual caution on thepart of lending institutions to provide credit for constructionprojects that apparently would be successful in this economicenvironment." Baker was unable to return a call to GlobeSt.com intime for publication.

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In previous interviews with GlobeSt.com, Baker had predictedthat the index would reach 50 by mid-year--50 representing positivegrowth. That could still happen, an AIA spokesman tellsGlobeSt.com--but after this month’s figures it is lesslikely. Much of the problem, he said, is that financing isstill tight for new construction.

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Other data points from the survey:

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The Northeast did breach the 50 mark at 50.6;
The Midwest, which had also crossed thatborder earlier this year, retreated to 48.5;
South (45.9);
West (42.9)

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Sector index breakdown:

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Commercial/Industrial (51.3);
Multifamily residential (46.9);
Mixed-Practice (46.8);
Institutional (43.4);
Project inquiries index (59.6)

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