The Architecture Billings Index dropped to 42.5 in January, down nearly three points from December’s revised rating of 45.4. Scores lower than 50 represent declining conditions, while those greater than 50 indicate an industry-wide increase in billings.

The index, released by the American Institute of Architects, is an economic indicator of construction activity that shows a nine- to 12-month lag time between architecture billings and non-residential construction spending.

“Projects are being delayed or cancelled because lending institutions are placing unusually stringent equity requirements on new developments. This is even happening to financially sound companies with strong credit ratings,” AIA Chief Economist Kermit Baker, Ph.D., said in a Feb. 24 news release. “This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects and declining property values – all (of) which serve as deterrents for construction activity.”

The regional averages in January were 41.3 for the South, 45.7 for the Northeast, 48 for the Midwest and 40.5 for the West. The sector index breakdown in January included mixed practice at 40.3, institutional at 43.1, multifamily residential at 50.1 and commercial/industrial at 44.9. New project inquiries in January came in at 52.5.

The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey and produced by the AIA Economics and Market Research Group. For more information, visitwww.aia.org.