Outlook mixed for design industry

Though a leading national indicator of nonresidential construction spending fell for the fourth consecutive month, some local architecture firms report that work is picking up in some sectors, leading to cautious optimism for industry improvement.

The American Institute of Architects’ latest Billings Index, which provides a nine- to 12-month look at the future of nonresidential construction spending, fell to 45.9 in June. Any score higher than 50 indicates an increase in billings. Though the June figure is nearly unchanged from May, it reflects a drop in demand for design services, according to an AIA news release. That news, however, is tempered somewhat by the AIA’s semiannual Consensus Construction Forecast, last released Aug. 2 and showing projections of a 6.2 percent increase in nonresidential construction spending, suggesting more work is on the way.

Rehabs and retrofits
In the AIA Billings Index, participating firms were asked to select their top construction sectors, and the top three were commercial and industrial rehabilitations and retrofits (60 percent); institutional rehabilitations and retrofits (48 percent); and new office construction (39 percent).

Jennifer Wilson, founder and principal of nForm Architecture LLC, said her firm has been doing more work on existing buildings, particularly high schools.

Wilson and her business partner, Travis Tindall, recently relocated to redesigned offices in a circa-1914 building on Commercial Street, another example of the firm’s commercial rehabilitation work, scheduled for completion by early October.

Wilson, who launched the firm in 2008, said her plan is to hire another architect near the first of the year, after keeping overhead low intentionally to weather the recession.

“Other people were having to downsize their companies, and we were starting (small),” said Wilson, who declined to disclose revenues but projected a 20 percent increase for the year.

Other projects for nForm include new bus facilities for Older Adults Transportation Service, or OATS, in Springfield and Macon, she said. Geoffrey Butler, president of Butler, Rosenbury & Partners Inc., said with financing scarce during the recession, new building projects dried up, but the same economic conditions – and a glut of bank-owned property – stimulated renovations and adaptive reuse.

“They can end up with a nice facility that is much less costly than had they taken a green field and built that building from scratch,” Butler said.

Recent examples of design renovations by BRP include converting a car sales facility at 2545 N. Glenstone Ave. for RNR Custom Tire and Wheel, and readapting a pregnancy crisis center on South National Avenue into Indie Blue hair salon, Butler said.

The firm also is designing a master plan for improvements at Rocky Ridge Farm, home to the Laura Ingalls Wilder Home & Museum near Mansfield. According to a company e-newsletter, BRP recently completed the design for a new museum, visitors’ center and library, scheduled for construction in 2013.

With architects designing fewer new buildings, structural engineer John Miller of J&M Engineering said he often consults on existing structures in such matters as load requirements for adaptive re-use.

Miller said he also has diversified, working on such projects as the new Outlaw Run roller coaster at Silver Dollar City.

“We’re getting more inquiries, and it seems to me that there’s more activity. As we started to expand our markets, that started to pay off as well,” said Miller, who declined to disclose revenues but projected 50 percent growth in 2012.

Around the bend
For Sapp Design Associates Architects PC, there is still design work for new projects, according to President Michael Sapp, and in August, the firm opened offices in Joplin and Kansas City.

Sapp said his firm expanded to better serve existing clients and to handle anticipated additional work during a time of favorable construction costs and loan rates.

“People are thinking if they’re going to do anything to take advantage of the situation, they better do it now,” Sapp said, noting ongoing school and church projects in Joplin and a new library in north Kansas City for the Mid-Continent Library District.

Sapp, who declined to disclose revenues but projected 50 percent growth in 2012 and 10 percent to 15 percent growth in 2013, said he hired one architect and relocated another for the new offices, bringing his total staff to 17.

Butler said his firm reduced staff to its current level of about 20 from 88 in 2008 but recently made its first hire since the recession, adding an intern architect.

“All our business went away, and we’ve had to pull in. ... We think it’s going to be a long time before there will be significant growth,” said Butler, noting that revenues have held steady between 2011 and 2012 and profitability per staff member is up, though he declined to disclose specifics.

As local firms re-evaluate operations, hiring decisions are tough for firms of all sizes to calculate, said architect Billy Kimmons, a sole practitioner and president-elect of the local AIA chapter.

“As work picks up a little bit, it’s not enough to make me confident that I can go out and hire a bunch of people, or even one,” Kimmons said. “So that leaves me to try to take care of everything that’s coming in the door.”

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