WORK ON THE BOARDS SHOWS MODEST SLOWDOWN

U.S. architectural firms reported a modest slowdown in growth of firm billings in May and a more substantial easing in inquiries for new projects, according to the Work on the Boards survey, recently published by the American Institute of Architects, (AIA) Washington, D.C. Kermit Baker, Ph.D., AIA's chief economist, said one in six firms reported a decrease in new inquiries in May relative to April (up from 11% a month ago), and one in three firms reported an increase in inquiries (down from 40% a month ago). This share of firms reporting an increase in inquiries is well below its level of a year ago. By area of specialization, firms concentrating in the residential market continue to report strong growth in billings and inquiries, while firms concentrating in the commercial/industrial or institutional sectors are reporting somewhat weaker conditions.

The easing of activity at architectural firms is consistent with trends emerging in the broader economy. Since the Federal Reserve Board raised interest rates by one-half of a percentage point in mid-May, many economic indicators have begun to show signs of slower growth. Employment growth in May was well below the average of the first four months of the year. In particular, evidence of weakness in construction employment is emerging, since employment in this sector has declined in three of the past four months.