Beginning its third year of negative conditions, the Architecture Billings Index (ABI) had a drop of almost three points in January. The American Institute of Architects (AIA) reported the January ABI rating was 42.5, down sharply from a revised reading of 45.4 in December. According to the AIA, this score indicates a continued decline in demand for design services. The new projects inquiry score was 52.5, down more than seven points.

“Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” says AIA chief economist Kermit Baker, PhD, Hon. AIA. “This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects and declining property values – all which serve as deterrents for construction activity. Until these factors are resolved, the design and construction industry — which accounts for roughly 10 percent of GDP and is facing unemployment figures in excess of 20 percent — will continue to face deteriorating market conditions.”