For Architects, a Downturn

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By Kris Hudson From The Wall Street Journal Online

A key barometer of construction-industry activity is signaling that the abrupt downturn in commercial construction could run deeper, and last longer, than previously expected.

The American Institute of Architects said its Architecture Billings Index for last month declined to 41.8, its lowest monthly reading since the aftermath of the Sept. 11, 2001, terrorist attacks. As recently as July, the index was near 60.
The index's 8.9-point slide in February follows a 4.3-point drop a month earlier, amounting to a 24% swoon over those two months. (Any reading above 50 indicates an increase in billings; a reading below 50 means billings for the industry declined.)

Jan Hatzius, chief U.S. economist at Goldman Sachs Group, said the ABI's decline indicates that the economic slump has engulfed commercial construction in addition to residential and likely confirms that the broader economy is in recession.
"We're really just starting to see significant deterioration in the commercial construction market," Mr. Hatzius said.
"I would tend to play down month-to-month moves, but this [February decline] certainly is consistent with the idea that the economic downturn is becoming more broad-based than it was a few months ago."

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