After slight U.S. uptick, architects wait for recovery
Despite a modest improvement in a key economic indicator for the design industry, area architects say it will still be awhile before a turnaround is complete.
The American Institute of Architects’ Architecture Billing Index bumped up to 47.9 in July from 46 in June, but it continues to reflect a decline in demand for design services, according to an AIA news release. That’s because the index reflects the approximate nine- to 12-month lag time between architecture billings and construction spending, and any score higher than 50 indicates a billings increase.
“Business conditions at design firms remain quite volatile,” said AIA Chief Economist Kermit Baker, in the release.
Baker noted, too, that despite the encouraging increase, the slowdown will likely persist for a while, a sentiment echoed by Ozarks architects.
During an informal member poll, AIA Springfield President Gerri Kielhofner found that many local firms haven’t yet seen significant increases in new work.
“Most clients are afraid to spend the money and the banks are still not lending for new projects. We’re seeing very little commercial work in the area,” said Kielhofner, vice president at Butler, Rosenbury & Partners Inc.
Kielhofner said institutional, government and church projects are among the jobs that are moving forward in the region, and she found, too, that smaller firms with five to 15 employees seem to be faring better than larger firms. “It doesn’t take a lot of projects for the smaller firms to stay busy,” she added.
Architect Stephanie Ireland, principal of Ireland Architects Inc., said business is starting to improve, but she’s realistic in making comparisons.
“If we compare the business we are seeing right now to three months ago, then we are busier. If we compare it to one year ago, then no, we are not busier,” she said, noting that like several other firms, she’s adjusted by trimming her staff, now at four, down from 10.
Though Ireland declined to disclose specific numbers, she said her revenues were down 50 percent in 2009. A bright spot, though, is that business is up 10 percent compared to July 2009, and she expects to wrap up 2010 with a 25 percent increase compared to 2009. The bulk of her work – about 75 percent – is for health care, she said, and her current project roster includes several renovation projects for St. John’s Health System.
Staff numbers also are down at Butler, Rosenbury & Partners, which has trimmed its staff to 62 from 88 during the last two years. President and CEO Geoffrey Butler said his firm is now working to maintain revenues at the 2009 level, $2.8 million. That might seem positive, particularly as many businesses have adopted the mantra that flat is the new up, but the picture dims drastically when that figure is compared to the firm’s 2007 revenues of $9 million.
Part of the challenge for BRP may stem from the fact that it specialized in full-service hotels and convention centers, themed retail sites such as Bass Pro Shops locations, and church and government projects.
“Retail and hospitality is completely gone,” Butler said. “The civic and church work has been completely cut in half.”
Among the company’s recent work is the pool renovation and addition at the Pat Jones YMCA and Preferred Family Healthcare Inc.’s juvenile substance abuse facility in Joplin.
At Hood-Rich Inc., business is fairly evenly split between architecture and engineering design, said Principal Jim Lohmeyer, who rejoined the firm about two months ago. Much of the firm’s work is for government entities, including engineering design for sewer, water and utilities.
Lohmeyer agrees that it might be awhile before business returns to pre-recession volume.
“I think we are slowly, slowly climbing out of the hole, but I think it will be a long time to get back to where we were, if we ever do,” he said.
While he declined to disclose numbers, Lohmeyer said Hood-Rich’s 2009 revenues dropped 7 percent compared to 2008. Through July, the firm is up 14 percent compared to 2009, Lohmeyer said, and he anticipates ending the year with an increase.
“We might be busy one quarter with the architecture side, and then it switches to the engineering side,” said Lohmeyer, noting that he expects two large Springfield-Greene County Parks Department projects and several smaller jobs to hit the books this year.
Hood-Rich also is looking outside the immediate area for work, and the firm doesn’t seem to be alone.
Lohmeyer said he recently traveled to Moberly in central Missouri for an informational meeting about the possibility of a new high school.
“There were probably 40 architects representing 25 to 30 firms,” he added. “They were from all over the state. There are a lot of people looking for work.”[[In-content Ad]]
Adrianna Norris became a first-time business owner with the opening of Finley River Chiropractic; PaPPo’s Pizzeria & Pub launched its newest location; and Huey Magoo’s opened its second store in the Ozarks.