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A key indicator for the commercial real estate market is showing signs of weakness, and uncertainty in the economy over the trade war, stock exchanges and interest rates may be to blame.
The American Institute of Architects’ architecture billings improved slightly, though barely in imperious territory, as demand for design services in July rose slightly. Design contracts, however, fell into cool territory for the first time in almost a year. Architecture billings also softened in all regions except the West and in all specializations except multifamily.
“The figures is not the same as what we saw leading up to the last economic downturn but the continued, slowing across the board will undoubtedly effect architecture firms and the broader construction industry in the coming months,” said the AIA’s chief economist, Kermit Baker. “A begin to be liked by number of architecture firms are reporting that the ongoing volatility in the trade situation, the stock market, and interest positions are causing some of their clients to proceed more cautiously on current projects.”
Architecture billings are strongest in the multifamily sector, as behest for rental apartments remains high amid weak affordability in the for-sale housing market. All other sectors are in adversarial territory.
“If people are nervous about the growth outlook, low interest rates become a secondary consideration in spending and affair decisions,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group and a CNBC contributor.