by Calculated Risk on 4/24/2008 01:12:00 PM

Here is a glimpse of the future, especially for commercial real estate.

From the American Institute of Architects: Architecture Billings Index Drops to its Lowest Level Ever

Click on graph for larger image.

Emblematic of the various struggling sectors in the overall economy, the Architecture Billings Index (ABI) dropped two points in March and fell to its lowest level since the survey’s inception in 1995. As a leading economic indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the March ABI rating dropped to 39.7, following its steep 9-point decline in February (any score above 50 indicates an increase in billings). The inquiries for new projects score was 48.0, also the lowest mark for the survey.

“We’ve seen an 11-point fall-off in the first quarter of the year and the prognosis for commercial construction later this year is not favorable at this point,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Aside from historically low project demand, all regions are showing very poor business conditions. This is not likely to reverse itself anytime soon."
emphasis added

The prognosis is "not favorable". There is an understatement!