Hopes were high that business at architecture firms would begin to pick up in 2010, but the latest survey of architects around the country suggests that the industry may be in for a longer than expected, cold winter. 

Architecture billings fell sharply in January to an index score of 42.5, down from 45.4 in December, according to new figures from the American Institute of Architects. The score represents a continued decline in demand for design services (any score above 50 indicates an increase in billings). In addition, inquiries regarding new projects dropped more than seven points last month to a score of 52.5.

“Projects are being delayed or canceled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” said AIA Chief Economist Kermit Baker.

“This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects, and declining property values--all of which serve as deterrents for construction activity. Until these factors are resolved, the design and construction industry--which accounts for roughly 10% of GDP and is facing unemployment figures in excess of 20%--will continue to face deteriorating market conditions.”

In a regional breakdown, the Midwest fared the strongest with a score of 45.7, followed by the Northeast (45.7) and South (41.32).  Not surprisingly, demand for architectural services was most stagnant in the West, which posted a score of 40.5.

Jenny Sullivan is senior editor, design, for BUILDER.