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VOL. 126 | NO. 10 | Monday, January 17, 2011

Architecture Report Brings Cautious Optimism

STACEY WIEDOWER | Special to The Daily News

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For two years, architects have dealt with a sluggish construction market that’s kept projects from moving off the boards and employees in a constant struggle for their jobs.

A recent industry report paints a more hopeful picture for the profession as it moves through 2011 and into 2012.

However, the overall tone of professionals in the field remains one of cautious optimism.

“It’s not blowing and going, but I would say that people are at least beginning to take a deep breath and think about doing things,” said Rusty Taylor, president of Memphis-based Evans Taylor Foster Childress Architects. “2011 might be a turning point. Most of our contractors we talk to think it might be 2012.

“It could be another long year for our business.”

The American Institute of Architects’ U.S. architecture billings index, a leading indicator that offers a nine- to 12-month glimpse into the future of nonresidential construction spending, rose more than 3 points in November to a reading of 52.

A measure of 50 indicates expansion.

The climb marked only the second reported increase in 2010. Firms in the South were among ones that reported a billings increase for the month, according to the AIA.

Despite that positive news, hiring activity among local architecture firms remains static, said Heather Baugus Koury, executive director of AIA Memphis.

“Activity hasn’t varied, I’d say, since early last year,” Koury said. “We’ve seen very few job postings and new hires, and that’s usually one of the signs that reflects major improvement in the economic balance within the industry.”

For Tim McCullough, a principal of Leininger McCullough Architecture in Germantown, 2010 marked the firm’s first full year in business. Although building a clientele during one of the worst periods in the industry’s history has been a struggle, McCullough said he and partner Douglas Leininger are entering 2011 with optimism.

“We’ve been optimistic since we started. If you’re not, you’re going to drive yourself insane,” he said.

Projects for the firm so far include a Dunkin Donuts franchise store and the Tunica Animal Shelter.

McCullough said he anticipates a pickup in client business this year.

“We think this spring is going to be better here in Memphis,” he said.

AIA Memphis is watching the market closely for signs that might be the case. When work does begin to pick up, Koury said, the job market will reflect it.

“We haven’t seen it yet,” she said. “To us, it’s the best indicator locally that we’re starting to see stabilization and improvement and projects getting off the boards and back on schedule.”

Taylor said his firm has managed to retain its staff throughout the downturn, which hasn’t been the case for many architecture firms and other construction-related businesses. Ongoing work from a slate of steady clients – including St. Jude Children’s Research Hospital, the University of Memphis and several health care and corrections industry clients – has pulled the company through the slowdown, Taylor said.

“We certainly, like everybody else, have been worried since the beginning, sometime in 2008,” he said. “We did a few things across the board up front to prepare for what we thought would be a shortening of work.”

Now, he said, the firm is holding steady but holding its breath, waiting to see the long-term effects the downturn will have on the construction industry.

“Generally speaking I do think people are feeling a little bit better,” Taylor said. “But what it comes back to, it’s all about the money. People have to have money to build things before we can design them. It depends on whether banks loosen up a little more and people begin to take risks – maybe not like they used to take, but whatever the new ‘new’ is.”

PROPERTY SALES 157 157 10,093
MORTGAGES 161 161 11,107
BUILDING PERMITS 229 229 22,402
BANKRUPTCIES 54 54 6,365