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

AIR reported the May ABI rating was 45.8, down substantially from a reading of 48.4 the previous month. The new projects inquiry index was 55.5.

"This dip is somewhat of a surprise since it appeared that conditions were pointing towards a recovery," said AIA Chief Economist Kermit Baker, in a statement. "The overriding issue affecting the entire real estate sector is unusual caution on the part of lending institutions to provide credit for construction projects that apparently would be successful in this economic environment." Baker was unable to return a call to GlobeSt.com in time for publication. 

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

Other data points from the survey:

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

Sector index breakdown: 

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