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Architects struggle to design a blueprint for recovery

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Architecture firms have experienced a 40 percent drop in revenues since the beginning of the recession in 2008 and have had to cut personnel by nearly a third, according to a report released today.

The industry continues to suffer as construction activity lags the national recovery, according to the American Institute of Architect’s (AIA) survey of its members.

Total construction spending levels, which exceeded $1 trillion in 2008, fell to under $800 billion in 2011. As a result, gross revenue at architecture firms declined from more than $44 billion in 2008 to $26 billion by 2011, a 40 percent decline over the three-year period.

Construction payrolls peaked in early 2007 and steadily declined through mid-2011 due to the housing downturn. Positions at architecture firms have generally followed the path of the broader construction industry.

Due to the heavy reliance of architecture firms on nonresidential construction activity, payroll positions continued to grow through mid-2008, according to the AIA. But at that point they dropped sharply through early 2011 and have not recovered much since.

Between 2007 and 2011, more than 28 percent of positions at architecture firms disappeared, more than erasing the 18 percent increase in architecture positions during the 2003-2007 upturn.

The general downsizing of firms also produced a change in staff compositions.

In the 2009 AIA “Business of Architecture” report, 60 percent of payroll positions were architecture positions (including interns and students), 21 percent were other design professionals (with engineers and interior designers accounting for the largest shares), and the remaining 19 percent were technical and support staff.

By the beginning of 2012, these proportions had changed, with the largest losses occurring in technical and nontechnical staff, positions that generally were not directly billable on projects. Architecture staff positions increased their share somewhat over this period, while the share of other design professionals remained essentially unchanged.

The survey also found that billings from renovations, rehabilitations, additions and other construction projects increased substantially in the last three years.