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Despite the lingering effects of an over-built housing market, the continued........ difficulty to obtain financing for real estate projects, budget shortfalls at state and municipal governments and the anxiety surrounding the prolonged European debt crisis, there are signs that the U.S. design and construction industry will be improving.

Corporate profits have returned to pre-recession levels and businesses have subsequently been increasing their capital spending, borrowing costs are at record low levels and pent up demand for commercial and retail projects factors into what projects to be a 2.1% rise in spending this year for nonresidential construction projects.

The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast, a survey of the nation's leading construction forecasters, also projects a 6.4% increase of spending in 2013.

"Spending on hotels, industrial plants and commercial properties are going to set the pace for the construction industry over the next two years," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.

"The institutional market won't experience the same growth, but healthcare facilities and places of worship are poised for a positive economic outlook in that sector."

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Interior Design Bill Sparks Controversy in Oregon

Proposed legislation to create a state-approved licensing program in Oregon has caused a contentious rift in the interior design community.

As it stands, interior designers in Oregon cannot stamp their own construction drawings, but must instead rely on architects or contractors to move forward on some projects.

A group of design professionals - the Interior Design Collaborative - has pushed for legislation that would require interior designers to obtain a license in order to work in commercial spaces. But opponents argue that such a program would unnecessarily limit clients' rights.

"I'll sit at the table with registered architects and engineers and licensed contractors, and I'm the only one not licensed or registered, even though the role of a commercial interior designer is as important as everyone else's," said Debora Souza, who is on the IDC's board and has been a designer in Portland for more than 30 years.

"We want to make sure we have the same recognition that our fellow team players on our projects hold."

The IDC contends that licensing would provide a level of accountability not present now. The existing nongovernmental system does not provide any enforcement for interior design qualification, even though some projects call for knowledge of building, fire and electrical codes.

11 Tips to build/manage a team:

1. Train Them

“Many entrepreneurs have the deluded expectation that an employee should show up able to do their job. No matter how competent they are, an employee will require train up and integration time. An added upshot, thinking about employee training cycles and growth paths really gets you thinking about how to grow your company.” ~ Charlie Gilkey, Productive Flourishing

2. Create an Entrance Interview

“We’ve created some documents for new employees to fill out right when they start about how they like to work, be rewarded, have meetings, etc. By having this written down it gives our whole team an understanding of how new team members might fit in and creates a better work culture.” ~ Caitlin McCabe, Real Bullets Branding

3. Get a Good Project Management System

“Entrepreneurs can keep the big picture in their head, but employees need to have the details in front of them. A good project management software (Manymoon is free) is a great way to keep the team focused and on task. Efficiency and productivity increase when you measure accountability with project management software.” ~ Lucas Sommer, Audimated

4. Teach Employees to Never Need a Manager

“Teach and empower your employees by giving them parameters to help them do their job autonomously. A sales rep doesn’t need a script, she must understand what makes a product valuable to a customer, and the many ways to point out those benefits. A service rep does not need a “company policy” to refer to, but rather a strategy for solving problems so the client is satisfied.” ~ Vanessa Nornberg, Metal Mafia

5. Set a Quarterly Theme and Vision

“Our first year in business we just did business day to day. But we found that even though we were doing awesome things, sometimes we got stuck in a groove because we weren’t shooting for a big goal. So we started setting a quarterly theme for our company. This theme goes into everything we do those three months, and everyone is focused on making that goal a reality. It helps focus efforts.” ~ Trevor Mauch, Automize, LLC

6. Open Door Policy

“Employees (especially new ones) are bound to make more mistakes than necessary if they feel they can’t ask you questions or get your feedback. Make sure you are accessible and available as much as possible. Literally, keep your door open to give the impression that anyone can visit to bounce an idea or ask a question of you.” ~ Benjamin Leis, Sweat EquiTees

7. Culture Is King

“Put your employees first, and they will take better care of your customers. As you are building your team, you must define what the inside of your company is going to look like. Your internal brand ultimately dictates how the company is represented on the outside. If you try to design the customer experience first, it will be forced and unnatural. Try to design the employee experience first.” ~ Nick Friedman, College Hunks Hauling Junk

8. Hire for the Ability to Get Stuff Done

“A small company cannot tolerate people who are lazy, procrastinate or are unable to use limited resources to push forward projects. You need people who can follow-through, find clever solutions and workarounds with a sense of urgency, and can take charge of a problem and drive it to a successful solution.” ~ Matt Mickiewicz, 99designs

9. Practice Transparency

“I’m always very honest with my team regarding financials and clients. In this economy, it’s important to be upfront with folks in every aspect of the business — particularly when you’re first getting started. Young professionals enjoy being an integral part of the planning and decision-making process, and it can also help them better understand how the business is run.” ~ Heather Huhman, Come Recommended

10. Tell Them How To Kick Butt

“I’m working on this, but it’s become obvious that letting someone know how to kick butt increases the likelihood that they will do so. Smart, talented people want to feel smart and talented, and that’s on you as a business leader. Entrepreneurs are often self-motivated and we forget that getting the most out of people means showing them how to succeed.” ~ Derek Shanahan, Foodtree

11. Encourage Openness and Honesty

“You never want your employees to be afraid to tell you the truth. You can encourage openness and honesty by: 1) Responding calmly when they tell you something has not gone as you expected 2) Talking through a plan for moving forward 3) Agreeing on follow up and accountability.” ~ Elizabeth Saunders, Real Life E®

AIA Architecture Billings Index Remains Positive for Third Straight Month

On the heels of consecutive months of strengthening business conditions, the Architecture Billings Index (ABI) has now reached positive territory three months in a row. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending.

The American Institute of Architects (AIA) reported the January ABI score was 50.9, following a mark of 51.0* in December. This score reflects a slight increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.2, down just a notch from a reading of 61.5 the previous month.

"Even though we had a similar upturn in design billings in late 2010 and early 2011, this recent showing is encouraging because it is being reflected across most regions of the country and across the major construction sectors," said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "But because we still continue to hear about struggling firms and some continued uncertainly in the market, we expect that overall economic improvements in the design and construction sector to be modest in the coming months."

The American Society of Interior Designers (ASID) Interior Design Billings Index ended 2011 slightly below positive territory at 49.4, continuing a decline in November (50.2) from October (51.4), when the Index hit its highest point in the second half of the year. The Inquiries Index, however, stayed positive at 52.0 (compared to 53.8 in November), suggesting that interior design clients may be holding off on projects until the economy shows stronger signs of sustaining a recovery. The Interior Design Index fell behind the AIA Billings Index for the second month in a row; it stayed at 52, the same as for October.

Decline Across Billing Sectors

Firms of all specializations - with one exception, multi-family/senior housing - reported billing declines. A pattern of growth across all sectors was evident in the first half of 2011, while this trend was reversed in the latter part of 2011.

Sector Index Means

Residential 56 [single 48, multi-housing 64], Commercial 44, Institutional 44

Regionally, firms in the Midwest, South and West regions reported gains in December, while the Northeast showed a decline. The West region reported increased billings in 10 of the past 12 months. The Midwest and Northeast were more inconsistent, reporting growth during the first six months and declines in the last six months.

Product Sales, Hiring Are Up

Despite the year-end dip, respondents reported substantial increases (10 percent or more) in product sales among a large number of categories, compared to those of the previous quarter. Products related to home remodeling projects were especially strong.

Four out of 10 respondents (39 percent) expect prices to rise, but by less than five percent. In the past three months, 10 percent of firms report hiring at least one employee. Nine percent of respondents indicated that their firm will increase employment over the next three months. This is a positive improvement from the four percent that reported such intentions in the previous quarter. While overall survey results show a backsliding in the industry at the end of 2011, firms with between two and nine employees finished 2011 on a strong note, posting an index of 60.2.

Designers Are Optimistic About 2012

Although the ASID Billings Index ended the quarter below 50, ASID firms expect business conditions to be better in the future. In December, the ASID Business Outlook Index was 74.3, up from the prior quarter's index of 56.4.

"Economic growth is solid but not spectacular," said Jack Kleinhenz, chief economist for ASID. "However, modest improvements in the broader economy, combined with the positive trend in inquiries could signal a more promising 2012."

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iPhone revenue is greater than all of Microsoft

by Steven Sande

The next iPhone is expected to launch next week and CNN Money decided it was a good time to run a list of superlatives related to the financial impact of Apple's smartphone.

To start out with, Apple's iPhone business unit could be a Fortune 50 company on its own. That business unit is already bigger than all of Microsoft in terms of revenue. From June 2011 until June 2012, the iPhone generated $74.3 billion in revenue for Apple. By comparison, all of Microsoft's business units together generated $73 billion in revenue.

CNN Money notes that if you take all of the revenue that Apple generates from the iPad, various iPod models, iTunes, the Mac and the 30 percent take of all apps sold, it still doesn't add up to the revenue stream from the iPhone. A year-by-year comparison of the impact of the iPhone to Apple's bottom line shows that in 2008 -- one year after the first iPhone was launched -- the device accounted for 9 percent of Apple's total revenue; now that figure is 53 percent.

Of course, there's always the question of what "worth" means, as Forbes pointed out a few weeks ago. In this case, we're talking about sales, and that's a pretty fluid thing. Nokia's Lumia 920 could be a huge hit, for example, and the iPhone is no longer the "number one" smartphone according to one survey.

Way back in Februrary Ed Bott did a breakdown of how Apple, Google and Microsoft make their money. Of course the iPhone was a major component of Apple's business, versus Microsoft's more distributed revenue streams, and Google's lopsided revenue stream (advertising). As MG Siegler points out, even if you took away the iPhone from Apple's chart, the remainder is still bigger than Microsoft's total business. That's significant.

Todd Saunders Lecture at Cornell University

Todd Saunders, founder of Saunders Architecture, will be delivering a lecture at Cornell University on the topic of ‘Architecture in Northern Landscapes’ on October 15. Bringing together dynamic building and material experimentation with traditional methods of craft, the Bergen, Norway–based practice has worked on cultural and residential projects in Norway, as well as England, Denmark, Italy, Sweden, and Canada. Led by a strong contemporary design sensibility, the studio believes that architecture plays an important role in creating place, using form, materials, and texture to help evoke and shape memory and human interaction. Fore more information on the event, please visit here.

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AIA Architecture Billings Index Inches Back into Positive Territory in August 2012

The Architecture Billings Index (ABI), a leading economic indicator of construction activity produced by the AIA Economics & Market Research Group, climbed into positive terrain for the first time in five months. The August ABI score was 50.2, up from the mark of 48.7 in July. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.2, up from mark of 56.3 the previous month.

"Until the economy is on firmer ground, there aren't likely to be strong increases in demand for design services," commented AIA Chief Economist, Kermit Baker, PhD, Hon. AIA. "In the meantime, we can expect to see design activity alternate between modest growth and modest decline."

Key August ABI Highlights

Regional averages: , South (52.2), West (51.2), Northeast (45.5), Midwest (45.3)

Sector index breakdown: multi-family residential (53.0), institutional (50.2) commercial / industrial (47.9), mixed practice (46.8)

Project inquiries index: 57.2

So - this is, like, GOOD news!

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