Friday, May 22, 2009

AIA: Inquiries up again...

The AIA Architectural Billings Index (ABI) report continues to show an increase for inquiries at the surveyed firms. While a rating of 50 means inquiries were level from the previous month, this month a 57 was posted.

Billings, certainly the more immediately important measure, was down slightly at 43.

These numbers correlate with the "It's getting worse at a slower pace" mantra on cable news. Now we get to argue about which letter-shape the bottom will be: U-, W-, or my favorite, V-shaped.

Two interesting additions to the information that the AIA tracks and presents are 1) video address from AIA's Chief economist Kermit Baker (click photo below for full video), and 2) information regarding stimulus funded projects.

I guess Kermit's face gives away how he feels about the numbers overall.

What Stimulus?
12% of firms say they have projects with stimulus spending on the boards and another 22% say they have had inquiries from such projects. Sounds good, but Kermit lets us know that these firms also report these projects will only account for about 5% of revenue, and that most of these firms are "large firms." Inside the Brackets hopes smaller firms will have access to the stimulus projects soon, as surely they will have a greater impact on their bottom lines.

Clearly this fellow firm owner agrees:
We’ve had two rounds of layoffs since September and probably will lose another group in the next week or so. Work has dried up because our clients are unable to obtain financing for good projects. Collection of receivables is terrible. The so-called “stimulus” would appear to have little, if any, positive impact on a firm like ours.
—34-person firm in the South, commercial/industrial specialization
Click here for full AIA article.

So What?
So, the April ABI is positive, but a fairly narrow slice of broader economic trends. Therefore, we're happy to point out that Inside the Brackets optimism was bolstered today by the Conference Board's announcement that their Leading Economic Index (LEI) was up with a 1% gain, its largest increase in nearly four years.

A one percent increase doesn't sound like much, but the LEI aggregates ten different leading economic indicators to give a "big picture" look at our country's prospects, and given the size of our economy, the moves are usually small, and changing directions takes a lot of effort.

Check out the press release here.

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