Architects face a ‘new normal’ but will recover as business slowly improves

“Big Tent” event brings together economists, designers in half-day session

Gary H. London

Architects and other designers need to readjust their careers to match the “new normal” in real estate development, according to local economist Gary London.

“The past is not prologue,” London says. “Virtually every understanding we’ve had about the built environment prior to the recession has changed.”

Those include smaller homes, less square footage per employee in offices, the Internets impact on stores and shopping and reduced manufacturing.

London said the upshot of these changes is that architects and others in related fields need to think of their career futures differently “because the environment will be different.”

“The job market will come back for them, but at the same, slow pace that the industry is expected to come back,” he said.

London will make these points at a half-day session sponsored by various architectural and design groups from 8 a.m to noon Saturday at the New School of Architecture and Design, 1249 F St. in downtown San Diego.

Organizers call it a “Big Tent” function, because it includes many design-related organizations and professionals all meeting in one place.

“The industry is 40 percent unemployed,” said architect Jack Carpenter, who is organizing the event. “The new economy is barely getting off the ground, and we know it is going to be different than it was.”

He said architects and others in the construction business will have to get used to working on smaller projects and, in housing, on apartments and town houses, rather than single-family homes.

“One thing we’re going to be talking about is expanding your portfolio,” Carpenter said. “You have to understand the new technology, construction management and other areas people might migrate into.”

Besides London, economist Alan Nevin also is scheduled to make a keynote speech. Panels will follow that include changes in governmental rules and regulation, new approaches to mixed-use development, legal changes affecting developers and financing issues.

Source:  San Diego Union-Tribune

Young architectural firm lands major projects, expands staff

Reaching higher in a recession

US Architecture Billings Index remains in the black

Signs of recovery – but some practices just hanging on

Work for architects in the US stayed close to break-even level during the first quarter of this year.

The American Institute of Architects reported that the score for its Architecture Billings Index was 50.5 for March – down slightly on the 50.6 recorded the previous month. Any mark above 50 reflects an increase in billings. The new projects inquiry index was 58.7, up from February’s figure of 56.4.

AIA chief economist Kermit Baker said: “Currently, architecture firms are essentially caught swimming upstream in a situation where demand is not falling back into negative territory but also not exhibiting the same pace of increases seen at the end of 2010.

“The range of conditions reported continues to span a very wide spectrum with some firms reporting an improving business environment and even ramping up staffing, while others continue to operate in survival mode. The catalyst for a more robust recovery is likely financing.”

Article via Building Design Mag

Obama appoints Schlossberg to federal arts panel [that oversees architecture]

President Barack Obama has appointed Edwin Schlossberg, an interactive media designer and husband of Caroline Kennedy, to serve on a federal panel that helps oversee the architecture and design of the nation’s capital.

The White House announced the appointment Tuesday night for the U.S. Commission of Fine Arts among other diplomatic and cultural posts. Schlossberg has a design firm in New York.

Members of the arts panel play a key role in shaping Washington architecture, including the design of new memorials or museums added to the National Mall or other parts of the city. Seven commissioners appointed by the president serve four-year terms without compensation.

Past members have included architects, landscape architects and artists, including Daniel Chester French who sculpted the statue of Abraham Lincoln at the Lincoln Memorial.

Hat tip Associated Press

Aspen, CO – Local architectural firms start to rebuild their staffs

Uptick in business has them cautiously optimistic about a rebound

Some of the larger architectural firms in Aspen and Basalt have hired additional employees this spring after cutting up to half of their staffs during the recession.

Poss Architecture and Planning, Harry Teague Architects, Cottle Carr Yaw Architects and Design Workshop’s Aspen branch have each hired three or four workers in recent weeks. Partners in each firm said business is up this spring and they are bringing on additional workers to help with projects on the books.

“This year is just different from last year in a positive way,” said John Cottle, a partner with Cottle Carr Yaw Architects.

However, the owners of each of the firms said they remain very cautious about the business outlook because there is so much uncertainty beyond the next year or so. Bill Poss said 2007 and 2008 were the best years in his firm’s 35-year history. He doesn’t expect business to return to that level in some time. On the other hand, any uptick in business over 2010 is welcomed.

“Last year was pretty bad,” he said.

Architectural firms are somewhat like a canary in the coal mine for the construction industry. Projects they work on translate into work for contractors and subcontractors six months or so later. Poss said he is constantly being quizzed by friends in the construction world who want to know if his business is picking up.

The answer isn’t a simple yes or no. His firm is working on a large hotel in North Carolina that had been temporarily placed on hold when the recession hit. It is an encouraging sign that the owners have felt the economy has recovered enough that they are moving ahead with the design, Poss said. “That’s about a 12-month deal” for his firm, he said.

Poss is getting more calls this year than last year from property owners in the Roaring Fork Valley who are considering building homes. While the interest is encouraging, he noted that “nobody’s pulled the trigger, so to speak.”

Consumers of architectural services, like consumers of all types, are shopping for the best prices. His firm has reduced its prices, which required it to cut costs. That meant laying off employees after the recession struck, and cutting salaries for the remaining staff.

Poss said he and his partners recently hired three more drafting people and interns and are considering hiring a fourth person. Even so, the firm isn’t anywhere close to where it was three years ago in terms of the staff count when it employed 56 people. That fell to about 22 at the lowest point and is now creeping back toward 30 workers, he said.

Poss said business has always been cyclical. He has experienced a downturn every five to seven years. This downturn was different because it was so severe and long. He said laying off so many employees was unpleasant because it had so many consequences.

“I had to lay off 30 families, not just individuals,” he said.

Harry Teague, another longtime veteran architect in Aspen, said it has been common over the years for the staffs of architectural firms to expand and contract, depending on the firm’s number of projects. Employees who were laid off from one firm could usually find work with another.

“The roller coaster is not particularly unique to this time” he said.

What was different in this cycle is that business dropped off for virtually all firms at once, according to Teague. That was tough because people who were laid off had a tough time finding new jobs with different firms.

Teague said his firm’s work is also picking up this year so he has hired four people, boosting the total to 12. He described the positions he hired for as a mix of architects, project managers and designers as well as interns.

Teague’s firm is working on a project at the Aspen Music School campus on Castle Creek Road, including the replacement of a building that can no longer be used. His firm is also designing a school in Crestone, Colo., a home in Telluride and a home in the Roaring Fork Valley. He is also the architect for a river center proposed by the Roaring Fork Conservancy in Basalt. That project is scheduled to be reviewed by the Basalt Town Council and Basalt Planning and Zoning Commission on Tuesday.

Overall, Teague said, it does feel as though the level of activity is increasing.

Cottle said his firm is staying busy with a combination of local, regional and even international projects, a combination of residential and commercial.

“Aspen is stronger than most of the other places where we work,” he said.

The firm is receiving more calls of inquiry so far this year compared to the last couple of years, he said. Cottle is encouraged because potential clients are exploring a variety of projects and seem serious about moving ahead.

The firm recently added four positions, one permanent and three tied to current projects, Cottle said. It’s too soon to tell if business has truly turned around, so he and his partners will remain cautious with their projections and with their hiring. Cottle said they don’t want to get in a position of hiring workers for permanent positions only to lay them off again. That’s rough on everybody, he said.

Cottle Carr Yaw employed 38 workers from 2000 through the end of 2008 and intentionally didn’t expand beyond that point. They laid off roughly half the staff during the lean last couple of years and are back to 20 employees with the recent hires.

Kurt Culbertson, chairman of the board for Design Workshop, said the firm hired two entry-level workers and two mid-level experience workers in its Aspen office within the last six months. The position were for landscape architects. They are looking to fill another two positions.

The firm — which also has offices in Denver, Tahoe, Austin, Salt Lake City, and Asheville, N.C. — works on everything from resort planning to residential gardens. The Aspen office is benefiting from an increase in business overseas as well as domestically and in the Roaring Fork Valley, according to Culbertson. He said some potential clients are even looking into real estate development, which has been on hold for the last couple of years.

Culbertson said the Aspen office of Design Workshop reduced its staff by about half after the recession.

“It hasn’t been fine times,” he said.

He’s been with the firm through five recessions, this one being the worst. The name of the game is living to fight another day.

“You can’t hire people back if you’re not in business,” Culbertson said.

Via The Aspen Times

Texas leads U.S. in corporate expansions, relocations

Texas has won Site Selection magazine’s 2010 Governor’s Cup for having the most new and expanded corporate facilities, while Dallas-Fort Worth was third among metro areas of 1 million or more, it was announced Tuesday.

Texas led all states with 424 projects, 50 more than in 2009, when it placed second. Ohio, which won the last four Governor’s Cups, was second with 376 projects, followed by Louisiana, 347; Pennsylvania, 337; and Georgia, 251.

“As well as Texas has done in the past and in 2010, we’re not going to be what we can be, or as strong as we can be, unless we have competition from other states,” Gov. Rick Perry said in a prepared statement.

The Chicago area, including parts of Wisconsin and Indiana, was the top metro area, followed by the Houston area.

Site Selection has awarded the Governor’s Cup since 1978. The rankings are considered a benchmark by corporate real estate analysts.

David Berzina, executive vice president of economic development for the Fort Worth Chamber of Commerce, said the chamber was involved in attracting 10 projects to the city last year, which added 1,057 jobs and $130 million in annual payroll.

The projects included a 190,000-square-foot expansion for General Mills and a 65,000-square-foot expansion for LG Electronics at the Alliance industrial park in far north Fort Worth, as well as the sale of the Ranch Style Beans plant near downtown Fort Worth to Allens Inc., which has reopened the plant to can vegetables and hired about 120 workers.

“We’re consistently ranked, relative to our population, in the top three or four in the last 10 years,” he said.The chamber worked on 89 possible deals in 2010 and landed the 10, Berzina said.

This year, the chamber has worked on seven new relocation possibilities, he said. The targets include a data center, a large office project and a “green energy project,” he said.

“Four of them I would say are warm; three are tire-kickers,” Berzina said.

“Gov. Perry has worked diligently in recent years to make his state pro-business, which is why Texas ranks as high as it does on matters of interest to site selectors,” said Mark Arend, editor-in-chief of Site Selection.

The rankings are based on new corporate location projects and do not track retail or government projects, schools or hospitals. To be considered, a new facility or expansion must involve capital investment of at least $1 million, create at least 50 new jobs or add at least 20,000 square feet of space.

Via Star Telegram

SOM commissioned for FTP City in Danang

Skidmore, Owings & Merrill, LLP (SOM) has been awarded the masterplan commission for FTP City in Danang, Vietnam. SOM’s preliminary plan for a sustainable new high-tech community at the edge of the city has been applauded by local authorities, including the Head of Planning and the People’s Committee of the City of Danang. SOM is now working closely with these authorities to finalise the project’s design and ensure its delivery.

The plan has been commissioned by FPT, an up-and-coming national IT and telecommunications company with over 10,000 employees. Covering an area of over 180 hectares, the plan incorporates a wide range of uses organised into a series of distinct districts, including a Town Centre, a Business District, and a series of residential neighbourhoods. The plan also incorporates a new University Campus for FPT University – specialising in information technology, software development and e-services. The campus will also contain a research institute and training centre for FPT employees, allowing new technology to be developed further and put directly into practice.

SOM’s concept is formed on key principles to reduce energy needs and carbon emissions by promoting best practices in mixed-use development in an emerging local context of luxury resorts and single-use residential communities. Instead, FPT City will promote a diverse living community with integrated local services accessed via sheltered and shaded walkable streets. In addition to a web of natural greenways, the plan also incorporates a wide network of smart infrastructure. As a major national IT provider, FPT will ensure the delivery of state-of-the-art communications and information technology to every business and household in the community.

The design also brings to life part of a strategic regional river corridor initiative to be implemented between Danang and Hoi An, a national tourist destination, by establishing a new riverfront eco-park. The waterfront park engages a large existing lake at the river’s edge and will be designed to restore, protect and enhance the wildlife habitat along its entire length and around the lake’s perimeter.

Via World News Architecture

Don’t string me along, U.S. temp workers say

Don’t string me along says architecture temp Althea Norwood Roberts

* Quarter of jobs created in past year were temporary
* Temps about 2 percent of overall employment
* Companies still cautious about permanent hiring

By Kristina Cooke

NEW YORK, Feb 22 (Reuters) – Althea Norwood Roberts gives employers three months to turn her temporary job into a permanent one. Then she looks elsewhere.

That’s as long as a company needs to see if she’s a good fit, the 35-year old single mother from California believes.
Norwood Roberts, currently temping for an architecture firm, is like millions of other Americans who are wondering if she will get permanent work.

“Temping is kind of like dating. It’s a trial-run for the company,” she said. “If they can’t make up their mind about you after 90 days, it’s probably not going to happen, they’re stringing you along.”

Norwood Roberts, who has a five-year old daughter, wants a job with security, good benefits and a pension. “It is not optional at this point. It is a necessity,” she said.

In the past year, about a quarter of all jobs created in the United States were temporary as companies remained cautious about the outlook for the economic recovery.

Over the past three recessions, temps — who are easier to hire and fire — have suffered the quickest and most severe cuts to their numbers at the beginning of a downturn, and then led broader employment gains when the economy recovered. For a graphic see http://r.reuters.com/geb97r

The pace of temporary job creation after the most recent recession — an average of about 25,000 per month — has been faster than in the past two, potentially a good sign for a labor market struggling with a jobless rate of 9 percent.

In the 17 months after the 2001 recession — the same period which has lapsed since the one in 2007-09 — employers added just 1,400 temporary jobs a month and the lag between the pick-up in temp hiring and the economy starting to add full-time jobs was 10 months longer.

But the faster pace of temporary hiring this time around hasn’t yet translated into significant full-time job creation.

“It will be a really good sign when we see those temporary jobs turn into permanent jobs,” Federal Reserve Chairman Ben Bernanke said this month.

Peter Capelli, a professor at the University of Pennsylvania’s Wharton School, says the jury is still out on whether the U.S. labor market is undergoing a structural change towards more temp workers or whether companies are just biding their time until demand for their products picks up and they add more long-term employees.

“It’s probably a bit of both. Another thing may be that employers are using temp work as a more thorough interview process, so it could be masking permanent hiring,” he said.

That is a trend that Randstad, the world’s second-biggest staffing firm, is seeing.

Randstad said more of its clients than in prior recoveries are using a “temp to perm” approach to hiring, to try the employee out before committing to taking them on.

NO LOYALTY BOTH WAYS

Some companies are actively shifting to what they say is a more flexible workforce.

In January, Lowe’s, the home improvement giant, slashed 1,700 middle-management jobs and said it would add thousands of part-time customer service employees.

One of the middle managers laid off was Dean Lutz, 43, from South Carolina. Lutz says the job market is the worst he has seen in his career, with most available jobs either seasonal or part-time.

“Honestly, jobs available out there aren’t very good.” he said. Companies “don’t want to pay benefits or higher wages.”

Lowe’s move is “emblematic of an evolution that took place starting in the late 1970s in which employers showed less commitment to their workers,” said Gary Burtless, a professor at the Brookings Institution.

But he said there is little evidence to suggest that temporary hiring has become more common in the past couple of years, with temporary workers as a share of overall employment peaking at 2.4 percent at the height of the dotcom bubble.

Despite the faster pick-up, the number of temporary jobs is still down about 15 percent from before the recession.

Tom Bonds, vice president of operations at the Huron Valley Steel Company in Anniston, Alabama, said he expects a shift back to permanent workers once there is more clarity about the economic and regulatory outlook.

“We prefer full-time workers, because they are going to be there … with temps there is no loyalty both ways,” he said.

While temporary workers may be high caliber at times of high unemployment, the cream of the crop may be quickly snapped up once the recovery picks up steam.

Norwood Roberts, the single mother in California, is optimistic. She has had two previous temporary jobs in the past 10 years, both of which turned into permanent positions.

“I have been able to juggle things so far. Some people don’t have that luxury,” she said. “I am one of the lucky ones.”

(additional reporting by Nick Zieminski, Dan Burns and Dhanya Skariachan)

——————————————————————————–

(c) Copyright Thomson Reuters 2011. Click For Restrictions. http://about.reuters.com/fulllegal.asp

U.S. architecture billings index falls in January

* January ABI 50.0, down 3.9 pts

* New projects index falls 5 pts to 56.5

* Cautious optimism for design industry: AIA

NEW YORK, Feb 23 (Reuters) – A leading indicator of U.S. nonresidential construction activity weakened last month after two months of improving numbers, an architects’ trade group said on Wednesday.

The monthly Architecture Billings Index fell almost 4 points in January to 50.0, a level that indicates neither expansion nor contraction of demand for design services, the American Institute of Architects said.

The billings index is considered a predictor of construction spending about nine to 12 months in the future, since buildings are designed long before they are erected. The latest readings suggest an anticipated recovery in U.S. nonresidential construction may not gain traction this year.

A separate index of inquiries for new projects fell more than five points to 56.5, according to the AIA.

“This slowdown is indicative of what is likely to be a very gradual improvement in business conditions at architecture firms for the better part of this year,” said AIA chief economist Kermit Baker. “We’ve been taking a cautiously optimistic approach for the last several months and there is no reason at this point to change that outlook.”

The AIA’s billings index dropped below 50 in January 2008, indicating falling demand, and stayed below that mark until last November. The separate inquiries index only fell below 50 briefly in 2008. It is typically higher than the billings index, as prospective customers solicit bids from multiple architecture firms.

Most diversified industrial companies get at least some revenue from nonresidential construction, selling machinery used for erecting buildings or components such as elevators or electrical and cooling systems.

Bernanke Encouraged by Drop in Unemployment, Cautions Full Recovery Will Take Years

Fed Chair Ben Bernake

WASHINGTON — Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that the sharp drop in unemployment over the last two months is encouraging but cautioned that it will take several years for hiring to return to normal. 

In prepared testimony before the House Budget Committee, Bernanke also warned that failing to forge a plan to reduce the government’s $1 trillion-plus deficits over the long term could eventually hurt the economy. 

The unemployment rate was 9 percent in January after the fastest two-month decline in 53 years. 

Those declines “provide some grounds for optimism on the employment front,” Bernanke said.

Bernanke is making his first appearance before the House since Republicans took control last month. He is expected to face tough questions from them, despite being a member of the party. 

The Fed chief said the economy is strengthening, helped by more spending by consumers and businesses. However, the economic recovery won’t be assured until companies step up hiring on a consistent basis. 

Bernanke’s remarks suggest the Fed will stick with its plan to buy $600 billion worth of Treasury debt by the end of June. The program is aimed to invigorate spending and the economy by lowering rates on loans and by boosting prices on stocks. 

Despite rising prices for gasoline and for many industrial and agricultural commodities, Bernanke said inflation remains “quite low.” He blamed the higher prices on strong demand from fast-growing countries such as China — not the Fed’s stimulus policies. 

The committee’s chairman, Rep. Paul Ryan, R-Wis., worries that the Fed’s stimulus policies, including debt purchases, could trigger inflation or fuel speculative buying of stocks or other assets. 

“Many of us fear monetary policy is on a difficult track,” Ryan said. 

However, Ryan expressed more concerns about the nation’s exploding government deficits. If left unchecked, it will eventually hurt the economy. Ryan favors budget cuts to get the deficits under control.

Hat Tip to Associated Press