During these tough economic times it is a welcome change of pace to see any positive progress. The Los Angeles Times yesterday ran an article highlighting a new study by the American Institute of Architects (AIA) covering an upturn in construction activity. According to the study, the increase in October 2009 was “the highest level of new business for the nation’s architects since August 2008.” This welcome news should not be interpreted as a complete turnaround however, as noted by Kermit Baker, chief economist for the AIA. Rather this news serves as a signal that the construction industry may start pulling out of its slump sooner rather than later. 

Not every member of the AIA agrees with the report as well, with Richard Keating of Keating Khang Architecture saying “We haven’t seen anything that would substantiate that, not here in Southern California.” I may not be very knowledgeable, but it seems to me as if Southern California always has a site under construction. The report provides a more general outlook for the industry as a whole and can function as an indicator for trends to come.  As mentioned in the article, architectural billings are a primary signal of ‘future development due to builders taking an adverse stance on spending money on design.’

                The study breaks down the increased activity according to development type. The top three designs include schools, government buildings and healthcare facilities. The fourth largest category includes multifamily residential developments such as apartment buildings. The same day Reuters and a number of economists reported on an increase in October of both home building and permits in the United States. According to that study the number of housing starts “is expected to have climbed by about 1.7 percent to 600,000 annual units on a seasonally adjusted basis from 590,000 in September, based on a poll of 73 economists. “ This comes in contrast to a staggering number of foreclosures and potentially rising unemployment that could counterbalance the move forward. However things are starting to look up and I believe we are starting on the right track, albeit a small one foot forward kind of start.

Where do you see the construction industry going? Will it remain in a slump or is there light at the end of the tunnel?

LA Times article: 

"Architects get more contracts in October"

by Roger Vincent

http://www.latimes.com/business/la-fi-architects18-2009nov18,0,3936817.story

Reuters article:

"October housing starts seen edging higher"

http://www.reuters.com/article/ousivMolt/idUSTRE5AG4Z520091117