Architects cautiously optimistic about 2010 outlook
Portland Daily Journal of Commerce – December 10, 2009
Economists say Oregon will emerge from the recession next year. But Portland architects aren’t ready to pop open the
champagne just yet.
At the end of 2008, the American Institute of Architects’ Architectural Billings Index reached 34.7 - its lowest level since the survey began in 1995. In October 2009, the ABI jumped to 46.1 - its highest level since summer 2008. The index is a leading indicator of whether architecture firms are gaining work; any score above 50 indicates an increase in billings.
But Kip Richardson, director of business development for Ankrom Moisan Associated Architects, said work at his firm has been flat, and that it is still waiting for money to be secured for public projects currently on hold. He is optimistic about 2010.
“It can’t get any worse, so it’s got to get better, right?” Richardson said. “We have work that looks like it will happen next year, but in this economy nothing is certain.”
Richardson says Ankrom Moisan has been going after more public projects such as affordable housing, since there is money in the pipeline for such developments. The firm is currently working on Ed McNamara’s Pearl Family Housing project.
“There is a lot of work in affordable housing that’s going to get more funding next year,” Richardson said. “Many agencies and developers are looking to address the need for housing.”
According to the ABI, firms that specialize in institutional work, such as education and health care, have reported the most improvement recently, while firms focusing on commercial and industrial work have stalled after a sharp improvement earlier this year. Sarah Hacker, marketing director for THA Architecture, said her firm has held steady this year, and even hired back a few employees it had lost in 2008, after securing contracts for larger education projects.
“I think education work will be steady next year,” Hacker said. “There are a lot of projects that have been put on hold that have been reimagined with new budgets. We’ll see if those come back.”
“Our direction has been in the institutional area for years and years,” said Bill Strong, a principal with Mahlum Architects. “Universities and colleges have to move on with their projects some way, whether it’s state or private funding.”
Though work in the public realm is ramping up, Trish Nixon, a principal of LRS Architects, said that not every firm is poised to compete. And the competition is stiff and widespread.
“People who didn’t do public work in the past have taken a big hit,” Nixon said. “It’s hard to play catch-up. I think you have to be careful chasing new types of projects when things are this competitive.”
It was common this year for 30 to 40 architecture firms to attend a single RFP pre-proposal meeting.
“It’s depressing to go to these RFP meetings and see 50 firms going after one little job,” Soderstrom Architects President Cameron Hyde said. “Hopefully things will loosen up next year so there’s enough work to go around again.”
Sarah Bracelin, director of marketing for Myhre Group Architects, shares that hope. Her firm, which previously focused on private real estate development, would like to get more public work. But competing for an RFP against 40 firms with years of public experience can be daunting.
“We’re working harder to get projects similar to work we’ve done for the Vancouver Housing Authority,” Bracelin said. “We’re transitioning and trying to focus on our experience.”
Even with the potential for more public work in 2010, architects still aren’t sure where they’ll stand next year. Though there are hints that things are improving, firms will continue to be cautious about how they grow their businesses.
“There seems to be potential for more projects from the public realm next year,” said David Wark, principal with Hennebery Eddy Architects. “But there are indicators that are at odds with each other. Economists say we’re about out (of the recession), and then we still have rising unemployment.”
Richardson said the number of employees at his firm’s Portland and Seattle offices has dropped from a high of 320 to 100. Nixon said LRS’ staff is half the size it was before the recession, with 45 employees. THA, Mahlum and Myhre Group Architects, as well as many other architecture firms, have reduced their staffs this year. Hacker said it will be a while before hiring begins en masse again.
“We’re all a little gun-shy,” Hacker said. “We’ve hired back a few people. But we don’t want to get ahead of ourselves. I’m not an economist or a fortune teller, but I’m guessing next year will be similar to this year.”