Contract - January/February 2012 - (Page 21)

INDUSTRY NEWS Slight Improvements in 2012 Economy Today’s economy in the United States is clearly in a di erent place than it was a year or even six months ago. As we entered 2012, the economy began its 11th consecutive quarter of growth. It has been a disappointing recovery and many economists agree that this recovery stacks up as one of the worst. While signs point to the economy improving, it is expected to only grow modestly in 2012—between 2 and 2.5 percent. The modest expansion implies only slow improvement in the labor market, which will keep consumers in a cautious state. Consumer spending—a key factor driving capital investment in structures, equipment, and furnishing—has been limited during this recovery due to a combination of persistent high unemployment, the unending slump across the country in the housing sector, lack of income growth, credit constraints and deleveraging, high energy and food prices, and geopolitical economic uncertainties. Business conditions are showing signs of improvement, though with some volatility. Consumer confidence, as measured by a Reuters/University of Michigan survey, rose 5.8 points in December, to 69.9. This continues an upward trend since a low of 55.7 in August 2011. The interesting area to watch, however, is the U.S. labor market. The economy added 200,000 jobs in December 2011, and unemployment fell to 8.5 percent, the lowest rate since February 2009. The most recent ASID Interior Design Billing Index has returned to positive territory after retreating during summer 2011. The index for October 2011 increased from 48.8 to 51.4 (scores of 50 or higher indicate expansion) with retail (57), entertainment (55), o ice (62), hospitality (55), healthcare (52), and single-family (52) billings in favorable territory, and multi-family (48), government (44), and education (43) with negative numbers. Similarly, the AIA Architecture Billings index rose for the third consecutive month in December 2011, from 52 to 54.2. The three-month moving average of the AIA index was positive for firms specializing in residential (60.1), commercial/ industrial (52.7), and institutional (50.6), and unfavorable for mixed practices (47.8). Both the ASID and AIA indicators portend improvement in the upcoming months. Construction spending for November 2011 was $807.1 billion, an increase of 1.2% from the revised October total and up 0.5% from the November 2010 level of $803 billion. Private nonresidential construction spending is up 4.5 percent from year-ago levels. Public spending rose 1.7 percent, with the gains concentrated in highway and education construction. While overall private residential and nonresidential outlays are on the mend, fundamentals for o ice and retail are anemic. November outlays were approximately $23 billion each for o ice and retail sectors, and approximately the same as a year earlier, and they remain more than 50 percent below 2008 peak levels. With a backdrop that includes the ups and downs of the real estate and construction sectors, the architecture, design, and construction professions will likely experience only a slightly improved economy in 2012 as compared to 2011. —JACK KLEINHENZ, PH.D., IS THE ASID CHIEF ECONOMIST UCX LED UNDERCABINET LIGHT ™ KONCEPT 323.261.8999 Select No. 118 at

Table of Contents for the Digital Edition of Contract - January/February 2012

January/February 2012
Industry News
Product Focus: Wall Treatments
Designer of the Year
A New Generation Raises the Bar for Public Interest Design
Legend Award
Annual Interiors Awards
Large Office
Small Office
Public Space
Historic Renovation
Adaptive Reuse
Designers Select: Seating
Ad Index

Contract - January/February 2012