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Architects in US predict gloomy 2009 for all property sectors

The American Institute of Architects said its Billings Index dropped in November for the ten month in a row and it expects construction spending will remain low next year, as developers delay or cancel projects amid the recession.

It was the lowest since the institute began its monthly survey in 1995. The index predicts the development of offices, apartments, warehouses and other buildings, with about nine to 12 months between when architects bill clients and when developers start spending on construction.

The institute attributed cutbacks by developers to job losses, declines in retail sales, and drops in travel spending.

'Some of our clients are showing a certain amount of hesitancy,' said Scott Kelsey, managing principal of Los Angeles-based CO Architects.

Architects are reporting less work in both the private and public sector. As well as housing and retail projects there is a slowdown in projects schools, hospitals and other buildings that receive public funds.

The Architecture Billings Index is based on a survey of firms owned by members of the American Institute of Architects. Participants are asked each month whether their billings rose, fell or stayed the same in the month just ended, and their responses are used to generate the index score.

Architecture billings fell in all four US regions tracked by the institute. The Midwest had the lowest score at 31.4, followed by the West at 33.5, the South at 36.8, and the Northeast at 39.5. Inquiries for new projects fell to 38.3 last month, down from 39.9 in October and a record low for that index.

The decline in building construction is providing discounts to those developers who are able and want to build, Kelsey said.

'The construction market has changed so dramatically in the last three or four months, projects are starting to bid 10 plus percent lower than they were six months ago. Now is the time to build. That's what we tell our clients,' he added.