Here is an interesting email from “JL” about the architecture industry.

“JL” writes:

Hi Mish-

A while ago, you published a stat from the American Institute of Architects (AIA) regarding architecture businesses and billing increases and decreases. I thought that was a good indication of future construction growth and I checked it out. It looks like it ticked up marginally for December but it’s still terrible according to the Wall Street Journal article Architecture Billings Tick Up, but Still Show Decline.

The Architecture Billings Index moved slightly higher last month, although the index remained below 50 for the 23rd consecutive month. The score in December was 43.4 compared with 42.8 in November. The December reading indicates a continued decline in demand for design services.

To give you some information just from my small circle of friends and family in Architecture:

  • All architects I spoke to said business was terrible and some in coma mode.
  • My wife, an architect, has almost no business.
  • Leads typically fade off when the bids come in and inquiries stop or get outright canceled.
  • Construction sites around Berkeley post signs on the mobile offices saying “NO-WE ARE NOT HIRING!”
  • Survey and discussion among architects and contractors revolve around how many carpentry shops have laid everyone off or shut down.

It hasn’t been this bad since the 70’s. Moreover, in the 70’s and 80’s there were some lucky firms would make a name for themselves with big government projects such as museums, embassies, government offices and such. We just don’t see that work anymore.

Moreover, the BLS employment numbers last week had a big drop in construction employment, yet again.

I expect that AIA number will fall off horribly in the near future.

As a personal anecdote, a neighbor who is an architect for his own business tells me much the same thing. He had full a time employee helper that became part-time, that became zero-time (laid off), and now he has nowhere near enough architecture work to keep himself busy.

Mike “Mish” Shedlock
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