A recent market analysis shows that the US commercial construction sector has again dropped, making this the fifth consecutive decline this year.
After designbuild source reported the May fall of 0.9 points from 47.2 to 46.3 in June, the American Institute of Architects (AIA) have reported a further fall this past month to 45.1.
As noted back in July, the fall has been seen predominantly in the non-residential and commercial sectors, the billing index the lowest it has been since February 2010.
While this is certainly not a promising outlook, the United States have been much worse industry conditions during the 2008-2009 Global Financial Crisis. In fact the real brunt of the consecutive fall will not be felt in the construction sector for a few months to come.
Architecture and construction go hand in hand, so it is only logical that a decline in architecture proposal growth would lead to a deficit in the construction industry.
Regionally, the national sectors had little differentiation. The South showed the strongest sector at 46.9 points, the West following close behind with a reading of 46.6. The Northeast was slightly lower at 46.6 with the Midwest lagging dramatically with a 44. 9 reading.
Again this month educational facilities and multi-family sectors were some of the strongest performers, the multi-residential sector expected to grow as vacancies fill and rents rise.
This new low is again in response to the struggling American economy. With a government in heavy debt, any type of government-funded initiative is going to have to be seriously justifiable and highly specified, without the luxury of the large budget projects the industry is used to. This is putting strain the industry, which is so imperative to overall economic balance as well as growth.
As stated earlier, the true brunt of the billing fall is yet to truly sting. As architecture initiatives dry up, the construction industry will simply have no projects to rely on and will feel a definite bite coming into 2012.
As it stands, this sector is still paralysed by the crippling national debt that is making it incredibly difficult for industry growth. The beacon of hope comes in the form of residential and multi-residential construction that will hopefully continue to grow through next year as the US economy tries to regain a forward moving momentum.