At CGI America Conference, AIA Seizes Initiative on Credit in Wake of Banks’ Reluctance to Lend
Chicago, IL – June 29, 2011 – (RealEstateRama) — The American Institute of Architects (AIA) today announced it would make available to potential investors a database of stalled building projects nationwide that make economic sense but which lack the financing to be completed.The AIA is announcing this commitment here today as a participating member at CGI America, the first conference of the Clinton Global Initiative solely dedicated to economic issues impacting the United States. The database should be available in coming months.
“We are committing to developing this database not just with the fortunes of architects in mind,” said AIA President Clark Manus, FAIA. “In large part the fortunes of the entire U.S. economy rest on the jobs-creating potential of the design and construction industry, which accounts for $1 in $9 of U.S. Gross Domestic Product, according to the U.S. Census Bureau.”
“For months, our industry has continued to suffer solely because banks won’t lend,” Manus said. “With this innovative, unprecedented commitment, the AIA has decided to step up and do something about that.”
The AIA commitment comes as the design and construction industry is plagued by a continuing dearth of credit for otherwise credit-worthy projects. Almost two-thirds of architects responding to a recent AIA survey reported at least one project that is stalled due to lack of financing, despite record low interest rates.
Of the 63% of firms surveyed with stalled projects, the average value of each stalled project was almost $50 million per firm. To make matters worse, the AIA’s May Architecture Billing Index (ABI) report, which provides a nine-to-12-month glimpse into the future of nonresidential construction spending activity, shows a continued deterioration in business conditions. The May ABI score announced last week was 47.2, a decrease from a reading of 47.6 in April. One factor cited in the continued decline is the chronic lack of financing.
In order to build and analyze the database of stalled projects, the AIA will establish a new survey that will begin to identify and analyze stalled projects from around the country that could be moved forward on almost any front but for the lack of financing. The commitment by the AIA involves soliciting information about stalled projects around the country from its members and allied professionals.
The AIA will then analyze and categorize the identified projects by various factors, including building type location (including those locations with a strong, skilled workforce), new construction versus retrofit, and impact on sustainability and livability goals. The AIA will work to identify opportunities for collaboration and financing to help move projects forward.
The Clinton Global Initiative’s Chicago conference is convening diverse stakeholders – including CEOs of American companies and international companies with U.S. operations, national and local government officials, and leaders from the nonprofit sector – to identify effective ways to strengthen U.S. industries, unlock capital for innovation and entrepreneurship, advance energy efficiency, build clean energy infrastructure, and train Americans for the 21st-century workforce.
Topics covered during the meeting will include education, green buildings, the healthcare workforce, manufacturing, rural development, service corps, small business growth, smart infrastructure and workforce training.
About the AIA Architecture Billings Index
The Architecture Billings Index (ABI), produced by the AIA Economics & Market Research Group, is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. The diffusion indexes contained in the full report are derived from a monthly “Work-on-the-Boards” survey that is sent to a panel of AIA member-owned firms. Participants are asked whether their billings increased, decreased, or stayed the same in the month that just ended as compared to the prior month, and the results are then compiled into the ABI. These monthly results are also seasonally adjusted to allow for comparison to prior months. The monthly ABI index scores are centered around 50, with scores above 50 indicating an aggregate increase in billings, and scores below 50 indicating a decline. The regional and sector data are formulated using a three-month moving average. More information on the ABI and the analysis of its relationship to construction activity can be found in the White Paper Architecture Billings as a Leading Indicator of Construction: Analysis of the Relationship Between a Billings Index and Construction Spending on the AIA web site.
About The American Institute of Architects
For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.
About the Clinton Global Initiative
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI) convenes global leaders to devise and implement innovative solutions to some of the world’s most pressing challenges. Since 2005, CGI Annual Meetings, which take place in New York each September, have brought together nearly 150 current and former heads of state, 18 Nobel Prize laureates, and hundreds of leading CEOs, along with heads of foundations, major philanthropists, directors of the most effective nongovernmental organizations, and prominent members of the media. These CGI members have made nearly 2,000 commitments, which have already improved the lives of 300 million people in more than 180 countries. When fully funded and implemented, these commitments will be valued in excess of $63 billion. The 2011 Annual Meeting will take place September 19-22 in New York City.
CGI America is the first CGI meeting focused solely on the U.S. The CGI community also includes CGI University, which hosts an annual meeting for undergraduate and graduate students, and CGI Lead, which engages a select group of young CGI members for leadership development and collective commitment-making.
For more information, visit www.clintonglobalinitiative.org