Baker: Institutional Demand A Positive for Architects

WASHINGTON, DC-In April, the Architecture Billings Index sucker punched the real estate industry with an unexpected decline--the index's first in ten months. Three months later, American Institute of Architects chief economist Kermit Baker is breathing a sigh of relief now that the latest numbers are in. The verdict: April's downturn was, as he had hoped, a minor blip. "We were worried when the index dropped below 50 in April; we hadn't expected it to turn down again," Baker told GlobeSt.com.

The AIA reported the June ABI score was 51.6, down from a mark of 52.9 in May, but still over the 50 mark. The new projects inquiry index was 62.6, up sharply from the reading of 59.1 the previous month.

April's number could have been weather related, Baker speculated. "Since then it has posted reasonably good numbers."

Two back-to-back positive readings suggest the design industry is indeed on a roll. Another positive indicator, Baker adds, is the clear demand emanating from the institutional front. "Institutions are the last to respond to cyclical trends and if we continue to see positive numbers from them I will feel very enthusiastic about the recovery."

According to the June API, the regional averages posted were 55.6 for the Northeast, 54.8 for the South, West posted a reading of 51.2, and the Midwest, 48.3.

Sector index breakdown consisted of commercial / industrial (54.7), multi-family residential (54.0), mixed practice (52.4), institutional (51.8).