On the same day that the Commerce Department reported a
, a trade group representing domestic architectural firms said on Wednesday that their billings retracted unexpectedly in May after three months of improvement -- three months that had contributed to the notion that a recovery had solidified, like poured concrete.
Because it takes nine to 12 months on average for construction to begin after an architect is booked to design a building (the average includes both residential and commercial projects), the index provides at least one narrow glance through the keyhole at how the construction industry will look a year from now.
Every month, the American Institute of Architects surveys its member firms. In May, its reading showed 45.8, down 2.6 points from April. Like many such metrics, anything below 50 indicates a retraction -- in this case, it reflects a decline in the number of commissions architectural firms have received for the design of new projects. In April, the index touched its highest level since January 2008, just as the recession began.
In a statement, the group's house economist , Kermit Baker, said, "This dip is somewhat of a surprise since it appeared that conditions were pointing towards a recovery." Though the index hadn't yet broached 50 since the recession started, the trends since February had been positive. Baker blamed the sudden drop on the same problem cited in all those previous months of declining architectural revenues: banks unwilling to lend money to real estate developers, who in turn have no need to hire architects.
The numbers have practical implication for a host of obvious companies: from construction-equipment maker
, which has come to
for its growth goals, to rebar forger
, to copper miner
Breaking the index down geographically, only the northeastern portion of the U.S. showed growth, registering 50.6. The South and West were the worst performers, with readings of 45.9 and 42.9, respectively.
Other weak economic indicators of late have ranged from the
, to the homebuilder confidence measure put out by the National Association of Home Builders.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.