The commercial real estate construction market in the United States may see a lull in development in the coming months due to a recent lack of interest in overall building.
Total building design requests posted a figure of 49.6 in April, slightly higher than March's figure of 48.8, according to the Architecture Billings Index from the American Institute of Architects. Despite the month-over-month increase, the figure was considered to be negative due to being lower than the benchmark figure of 50.
Even with this decline, some aspects were positive. The report noted that the new projects inquiry index improved to 59.1 during April, slightly higher than the previous month's 57.9.
"Despite an easing in demand for architecture services over the last couple of months, there is a pervading sense of optimism that business conditions are poised to improve as the year moves on," said Kermit Baker, chief economist at AIA. "With a healthy figure for design contracts this should translate into improved billings in the near future."
The multifamily residential sector had the highest reading of all sectors measured, with a figure of 52.6, the report explained. Mixed practice facilities reached 50.7 and the commercial/industrial reading was 50.2. The institutional market was the only one to have a negative figure, as it was at 47.1.
Just one of the regions examined had a positive figure. The report added that the South had 57.5 in April, while the West was the closest with 48.9. Both the Midwest and Northeast also were below the threshold, as they had figures of 47 and 42.9, respectively.
Construction ramps up in April
While progress may slow during the latter part of the year, construction industry interest is still on an upswing. According to a report from McGraw Hill Construction, overall construction starts improved to a rate of $533.7 billion in April, 3 percent higher than the same month in 2013.
"With construction starts now climbing for two months in a row, it's become more apparent that some of the lackluster activity in early 2014 was due to tough winter weather conditions," stated Robert A. Murray, chief economist for McGraw Hill Construction.
Nonresidential building was a major reason for the overall improvement, as its rate was $202.8 billion, 14 percent higher than 12 months earlier, the report added.