October 23, 2009
Architecture Firm Billings Remain Relatively Weak
Project Backlogs at Firms Shrink to 3.9 Months
Despite recording the highest inquiries score in two years, the Architecture Billings Index remains mired in the low 40s, with a score of 43.1 reported in September. Architecture firm billings have been in this vicinity for six of the last seven months, and have not yet shown any clear signs of approaching 50, and an increase in billings. Business conditions remain quite poor for many firms, with increasing numbers indicating nonexistent project backlogs and insufficient billable hours for current staff. Inquiries scores are still rising, but this continues to be triggered by the increased competition for projects, rather than actual increases in project activity.

Collections Without Counterclaims
Effective management of the process can forestall future problems
With more clients facing financial problems, managing collections more diligently has become a necessity. The impact of not getting paid is significant. Depending on a firm’s profit margin, writing off a $100,000 receivable is the equivalent of giving up $1 million to $1.5 million in gross fees—not something many firms can afford when revenues are declining.

Economic Stimulus • U.S. Economy • Energy

Economic Stimulus: Slow spending on infrastructure colors perception of success
U.S. Economy: Companies move from centralized to regional centers
Energy: Prices to moderate if supplies aren’t disrupted.

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Welcome to the Business Zone
This is the place for our monthly Work-on-the-Boards survey report, quarterly Housing Trends survey report, and biannual Consensus Forecast, all by AIA Chief Economist Kermit Baker, PhD, Hon. AIA. You’ll also find tips for managing the business side of your practice, as well as the weekly Kiplinger Connection.