After dropping for four straight months over the summer, architectural billings have increased for the second month in a row, reaching the highest point in two years.

The on Monday that its Architectural Billings Index had increased 1.6 points from August to a score of 51.6 in September. The index is an economic indicator of construction activity that reflects the 9-to-12-month lag time between architectural billings and construction spending. Any score above 50 indicates growth, while a score below 50 indicates decline.

Architectural firms in the West had the highest number of all four regions in the nation, with a score of 53.4. This follows nearly five years of declining numbers, according to the report. The South had the second highest score at 51.9. The Northeast and Midwest had declining numbers, with 49.5 and 47.2 respectively.

Within specific sectors, residential showed the most improvement with the highest score in seven years (57.3). The institutional sector had a score of 51 while the commercial/industrial sector lagged behind with a score of 48.4. Commercial buildings, the report stated, are overbuilt in many areas around the nation, and firms specializing in that sector may still see softness in the market until they are filled.

AIA also reported that 44 percent of architectural firms pulled across the nation are looking to hire employees; 73 percent for those with billings greater than $5 million.

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The Architectural Billings Index dropped in June for the third straight month, suggesting an upcoming weakness in nonresidential construction projects, according to the most recent report from the American Institute of Architects.

The ABI represents the nine- to 12-month lag time between architectural billings and construction spending. In June, the index rose 0.1 percentage point from May to 45.9. Anything below a score of 50 reflects a decrease in demand for design services.

Kermit Baker, AIA‘s chief economist, said that while not all firms experienced negative conditions, many were still struggling with the “sluggish and erratic marketplace.”

The West had the worst of it, with the regional ABI scoring 44.3. The Midwest fared best at 48.0; the South was at 47.0 and the Northeast was at 46.4.

The multifamily residential market saw the most activity with a score of 49.0, while the commercial/industrial sector scored 46.9. Institutional projects came in at 46.0 and mixed practice projects at 45.9.

On the bright side, the new projects inquiry index rose 0.4 points to 54.4 indicating there may be some projects brewing on the distant horizon.

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Architectural billings were up in January and construction could soon follow, though the positive impact may not occur locally.

“We find that we’re doing work for companies that are expanding their operations in other countries,” said John Flynn, principal and regional practice leader for MulvannyG2 Architects in Portland. “We have an office in Shanghai and we see that work continues to move along at a pretty good pace, a good clip.”

According to the American Institute of Architects, the Architecture Billings Index inched its way into positive territory in January for the third straight month. The index is an economic indicator of construction activity that reflects the nine-to-12-month lag time between architecture billings and construction spending.

In January, the indexed number was down 0.1 points from December at score of 50.9 (any number above 50 indicates an increase in billings).

“Even though we had a similar upturn in design billings in late 2010 and early 2011, this recent showing is encouraging because it is being reflected across most regions of the country and across the major construction sectors,” said Kermit Baker, AIA chief economist, in a press release.

Baker went on to say that he expected future economic improvements to be modest in the coming months.

Regionally, the Midwest led the nation (53.7), followed by the South (51.6), the Northeast (50.7), and the west (45.6). By industry, residential multifamily projects saw the highest demand (52.6), followed by commercial/industrial (52.2), institutional (51.1), and mixed practice (46.1).

Flynn said things had been picking up locally since the middle of 2011, especially in the commercial sector and, to a lesser degree, the corporate sector – but not a whole lot.

“I’m pretty optimistic because our reach is more than just the Portland region,” he said. “We have clients that work across the nation and beyond and that helps us as an office.”

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The winds of change are blowing.

Talk to Dennis Cusack, managing principal for Portland architecture firm , and it’s almost as if he can feel it.

“I think that’s one of the things that’s true of the entire industry – whether it’s a contractor or developer or an architect. It’s a different world out there today,” he said. “What we were able to do four to five years ago, just building new buildings, is not the situation that we are in today and it is not likely to be the environment that we are in for the foreseeable future.”

SRG’s revenue and overall billings dropped in 2011. And it’s not alone.

According to the , the United States’ western region in November scored 45.6 (a score above 50 indicates an increase in billings). The index is an economic indicator that reflects a lag of approximately nine to 12 months between architectural billings and construction.

Nationwide, billings increased 2.6 points to 52. It was the first positive mark since August, but it also was consistent with the up-and-down pattern for the past couple of years. For SRG, this year’s decrease in revenue came from a development slowdown in the public sector.

“As our projects have finished up that have been in the office for three to four years, there is just significantly less work to replace it,” Cusack said. “And that work that’s out there – there’s an awful lot of competition for.”

SRG lands 70 percent of its work from the public and institutional sectors, so a decline in revenue may be a telling sign of the times – namely, the recession is catching up with state coffers.

Jack Kenny, finance manager for Oregon’s Budget and Management Division, said that authorized funding for capital construction projects decreased from $1.3 billion during the 2009-2011 biennium to just $379 million in the present biennium.

Of that $379 million, only $59.9 million is general fund-supported debt – a significant decrease from the approximately $428 million in general fund money that the Legislature authorized during 2009-2011. The vast majority of the money from both periods went toward construction of the new Salem psychiatric hospital, for which SRG was a lead architect.

Additionally, of the $428 million in the previous period, Kenny said $149 million was set aside for higher education and community college projects. This biennium’s budget includes zero dollars for such work.

Part of the reason for the decline now, Kenny said, is because of an Oregon state law that allows only 5 percent of incoming revenue to be issued as general fund-supported debt for capital construction. But another reason is the economy.

“There is still unmet need out there, but we just don’t have the resources to finance the debt,” Kenny said.

Cusack said SRG stayed pretty busy throughout the recession, mostly because of the Salem hospital project. He’s not surprised the recession has now caught up to the firm because public-sector developers are typically the last to feel the pinch. Private-sector developers are the first to go, he said.

“But they’re also the ones that are likely to be the first to come back, because if they see a glimmer of activity and a need for commercial office space or a need for rental housing, they can move quickly and they’re motivated to move quickly,” Cusack said.

One of those companies returning to the development arena this year is A&R Development Co., which is helping build an indoor mountain bike park in Northeast Portland.

A&R principal Robert Sacks said that during the recession the company switched gears from developing its own properties to acting as a representative for other owners.

As a company that retains and manages its properties, A&R has felt the economic pinch mostly through its retail tenants that have struggled to make ends meet, Sacks said.

“The change in capitalization rates and bank requirements and all that stuff also has affected us,” Sacks said. “However, in general, because we own and manage our own property, we’ve been able to weather the recession a lot better than many developers who live or die on the basis of whether they can have projects from which they can derive development and construction fees.”

And lackluster consumer spending has made retail development a hard sell. In November, the AIA reported that a major reason for stalled construction projects around the country was because of dramatic tightening of underwriting criteria for commercial real estate loans.

Mark Paskill, vice president of in Portland, said banks are weary of retail development projects because – unlike multifamily projects that may have 100 separate tenants paying the rent – retail centers are dependent on the success of a few anchor businesses.

“Take a retail center,” Paskill said. “You’ve got five tenants that are covering the income stream, and right now those five tenants are under stress because of the economy.”

Portland’s has taken a similar route in recent years, by focusing on fee-based property development and asset management. It even created a branch company called to operate as a green consultant for property owners.

A&R, which has worked to renovate two downtown office buildings for a private company this past year, is slowly returning to property development, according to Sacks. He said he expects the retail industry to improve slightly next year.

Kenny said he expects the Oregon State Treasurer’s office to announce in January that it will pay off several long-term debt obligations, which could free up money for capital construction in the next biennium.

In the meantime, Cusack said he and many others will be brainstorming.

“I think we are all trying to think about what this new economy will look like,” he said. “Where are there going to be opportunities for us to be successful, knowing that it’s probably not what we’ve been doing for the past five, 10 or even 15 years?”

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After four straight monthly declines, the American Institute of Architecture’s Architecture Billings Index took a sudden upturn in August.

According to today, the ABI – an economic indicator of future construction spending based on the billings of architecture firms – ended August with a score of 51.4. Any score over 50 means an increase in billings from a month previous, while anything below means a decrease.

The ABI has been below 50 for five months, with a lower score coming each consecutive month over the past four months. This culminated at the end of July when the AIA recorded a score of 45.1.

“Based on the poor economic conditions over the last several months, this turnaround in demand for design services is a surprise,” said Kermit Baker, chief economist for the AIA, in a statement accompanying the data. “Many firms are still struggling, and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle.”

Regionally, the Midwest recorded a score of 49, the Northeast a score of 46.5, and both the West and South had a score of 47.4.

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Not only does the American Institute of Architects’ Architecture Billings Index continue to drop, but it’s starting to drop at even a faster rate.

After dropping by nearly a point in June, the ABI – an economic indicator of construction activity that reflects a nine- to 12-month lag time between architecture billings and construction spending – dropped over a point in July to 45.1. The dismal monthly reading – any score below 50 means a decrease in billings from a month previous – marks the fifth straight month the ABI has dropped.

“Business conditions for architecture firms have turned down sharply,” said AIA Chief Economist Kermit Baker in a statement accompanying the release of the data. “Late last year and in the first couple of months of this year there was a sense that we were slowly pulling out of the downturn, but now the concern is that we haven’t yet reached the bottom of the cycle.

“Current high levels of uncertainty in the economy don’t point to an immediate turnaround.”

The 45.1 score recorded in July – down from 46.3 a month previous – marks the steepest decline in billings since February 2010. The ABI ended May at 47.2 and April at 47.6. Before April the ABI had been gradually increasing for almost a year.

Interestingly, multifamily residential fared the worst out of all the different industry sectors despite the growth in multifamily development this year. The ABI for multifamily in July was 44.7. Comparatively, commercial/industrial scored 47.9, institutional a 47.2 and mixed use a 47.1.

Regionally, the South scored a 46.9, the West a 46.6, the Northeast a 46.4 and the Midwest a 44.9.

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Bad news continues to roll in for the architecture industry as June marked the third straight month of declines in the American Institute of Architects’ Architecture Billings Index.

The ABI, an that reflects a nine- to 12-month lag time between architecture billings and construction spending, was 46.3 at the end of June. Any score below 50 marks a decline from the month previous.

The three month decline comes on the heels of five straight months of modest improvements that started in late 2010.

“This seems to be a case of not thinking it can get any worse – and it does,” said AIA chief economist Kermit Baker in a statement accompanying the new data.

The data seems to reflect an interesting period in the economy where public dollars for construction projects have dried up and the private sector still hasn’t revived. The lowest ABI was for institutional projects, which recorded a score of 45.9, while multifamily residential (49.6) and commercial/industrial (50) remained unchanged from a month previous.

The western U.S. outpaced the rest of the country by reporting a score of 51.7. The number is significant in that the west has trailed the rest of the country the entire first half of 2011. Then Northeast (47.5) and the South (47.3) reported slight drops from a month previous, while the Midwest (44.6) showed the most significant drop.

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After improvements through late 2010 and into early 2011, the Architecture Billings Index had its second consecutive monthly decrease in May.

The American Institute of Architects’ ABI, a measurement of architecture firm billings for work completed, landed at 47.2 in May, according to data released today by the organization. Any score below a 50 represents a decrease from the month previous, while a measurement above 50 represents an increase.

The ABI had been going through a period of steady monthly gains since the fourth quarter of 2010. That positive trend ended in April with an ABI of 47.6.

“Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared,” said AIA Chief Economist Kermit Baker in a statement accompanying the release of the data.

Baker pointed towards state budget constraints and a prolonged credit freeze from lenders for financing commercial projects as the two main culprits for the low monthly ABI score.

Regionally, the western portion of the United States reported an ABI of 49.3, which is relatively positive for the region considering previous monthly data. The Northeast reported a 47.6, the South a 47.5 and the Midwest a 45.9.

By industry sector, multifamily residential (53.6) was the only sector to record above a 50. Mixed practice recorded a 49.1, commercial/industrial a 46.5 and institutional a 44.9.

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After several months of positive – albeit slow – growth, the Architecture Billings Index fell by almost three points in April.

The ABI, an indicator of construction spending to come in the next nine to 12 months, ended the month of April with a score of 47.6, according to the American Institute of Architecture. Any score below a 50 indicates a decrease in architecture firm billings compared to the month previous, while any score below a 50 indicates an increase.

The ABI nationally had been above 50 for each month through 2011 until April and ended March with a score of 50.5.

Regionally speaking, the West (47.7) and the South (48.3) followed the negative national trend, while the Northeast (51.2) and Midwest (51.1) both saw increases in architectural billings compared to a month previous.

Multifamily residential saw the largest increase nationally in architectural billings from a month previous, recording a score of 53.9. The ABI for commercial/industrial (49.9), institutional (45.9) and mixed-use (45.2) all decreased from a month previous.

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While architecture billings only increased slightly in March throughout the United States, project inquiries rose largely for a second straight month.

According , the nonprofit’s Architecture Billings Index ended March at 50.5. Anything above a 50 shows an increase in billings, as reported by architects across the country, from the month previous. February’s ABI was 50.6.

Regionally, the Midwest and Northeast fared much better than anywhere else. The Midwest recorded a 53.5, continuing to lead the way in recovery after posting a 55.3 in February. The Northeast (51.4) and West (50.6) also saw increases in billings from a month previous. The South, conversely, saw a slight drop, finishing March at 49.7.

Architecture billings improved the most in commercial/industrial work, ending the month at 54.7. Multi-family residential also saw a slight increase at 50.8.

But while things remain steady on the billing front, project inquiries are surging. The project inquiries index, which is a measurement similar to the ABI, ended March at 58.7. This follows strong recordings in the previous two months as well.

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