Firms Report Stronger Conditions in March

June 1, 2004
NOTEWORTHYFirms Report Stronger Conditions in Marchby Kermit Baker, Ph.D., Hon. AIA, chief economistBusiness conditions at U.S. architecture firms continued to show dramatic improvement in March 2004. The March index for billings was 121, one of the strongest readings in the history of the index. Over one-third of firms reported an increase in billings. Conditions were improving for firms in all regions of the country, with particularly sharp gains among firms in the South. Firms in the West and Northeast indicated a stronger improvement in conditions than in any month over the past several years. Firms concentrating in the commercial/industrial sectors reported the greatest improvement, with almost half of these firms indicating an increase in billings in March compared to only 10 percent with declines.Business conditions at firms are expected to improve even more in the months ahead. The inquiries index was 140 for March, and almost half of firms saw an increase in inquiries over the month. As with billings, commercial/industrial firms saw the strongest growth in inquiries for new work.The broader economy is improving, but not nearly as sharply as the upturn reported by architecture firms. March saw a solid gain in business payrolls; over 300,000 payroll positions were added in March, and almost a quarter of them were in the construction sector. Even the manufacturing sector held steady. March was the first month since July 2000 that there was not a loss in manufacturing employment. In spite of this strong showing, the national unemployment rate increased to 5.7 percent.The economy may be heating up enough to add some inflation back in the mix. Increases in consumer prices have been running below two percent in recent months, but pressures may be building. Prices at the wholesale level (producer prices) have been increasing by about three percent per year for the past year. Much of this is volatile energy prices, but even netting out those costs, producer prices are trending up. The recent rise in steel prices may also be an isolated case, but there seems to be more pressure on prices overall.Leading indicators for the economy point to continued growth, an attitude shared by many business executives. The CEO Business Confidence Survey shows an extremely upbeat first quarter 2004 reading, the strongest reading for this Conference Board survey in over two decades.In spite of strong gains recently in business conditions at architecture firms and continued improvement in the overall economy, compensation gains this year at firms are expected to be modest: just over three percent in guaranteed compensation for principals and partners as well as licensed architects, just over four percent for non-registered graduates (not on a licensure path), and below three percent for interns.More than half of all firms expect no increases or even declines for principals and partners, and about a third expect no gains for other architecture-related positions. Larger firms (billings over $5 million annually) are more optimistic about compensation increases this year for all position categories. Commercial/industrial firms also are more likely to project increases in compensation this year for these positions. Consortium Reveals Differing Views on Design's RoleA lively and divided discussion of design and its function in the modern workplace distinguished the 10th semi-annual Corporate Consortium held in April in Minneapolis, MN. Sponsored in part by Haworth, Inc., in partnership with Orfield Laboratories, the program was entitled "The Spirit of Place—Sustaining the Worker: Human Sustainability Versus Physical Sustainability." Speakers included Eric Moss of Eric Owen Moss Architects; Shashi Caan of the Shashi Caan Collective and Parson's School of Design; and Catherine Haley of Lehman-Smith + McLeish.Orfield Laboratories founder Steve Orfield opened the session by asserting that, "The cubicle is a sensory-deprivation environment that must be addressed." He further claimed that, "Good buildings don't cost more than bad buildings to build, they are just done with more intent." Orfield claims that a good or bad office building is determined through observing its impact on the people who use it every day. By this definition, "The only real measurement of architecture is a measurement of the people who use it." These opening comments set the tone for the day.Architect Eric Moss spoke of "An Approach to Designing Stimulating and Creative Environments." His premise was that there is no human order that defines the start or the end—of anything. Instead there are only provisional paradigms; perpetual uncertainty. He quoted Ovid in stating, "What was before impulse, is now method." Moss observed it is an unfortunate condition of human nature that impulses inevitably become routine. In his opinion, "It is better to sustain impulses and instinctive behaviors." Showing the consortium attendees a number of avant-garde structures that he and his firm had designed, he emphasized that there is always room for instinct and intuition. One office building, which had a multi-story section designed in a sphere-like configuration, was created allowing impulse and inspiration to address the business's varied needs. This section of the building had floors of varying widths and lengths created specifically to address each department's specific requirements.Moss noted that potential clients are often afraid of creating structures that do not fit the "norm." They tend to equate the unfamiliar with higher cost, lower durability, and/or increased maintenance. If more clients would take a chance and "make it new," they would often find themselves surprised by the solution that is proposed. "The Office as a Stimulus" was the topic that interior designer Shashi Caan addressed with relish. Her conviction is that human beings must be stimulated one person at a time. There is no "one-design-fits-all" lowest common denominator for any office space. Quoting Mother Theresa picking up a dying child in a battle zone and responding to a journalist's inquiry as to why it made a difference, she said, "It makes a difference to this one." Caan believes the same energy and commitment is required of designers when creating interior spaces for clients and their individual employees. And while she emphasized that this is not the mainstream approach to designing for the masses, Caan was adamant in her stand that, "Designers need to stop thinking of themselves as these little, insignificant people. They have to stop conforming to someone else's system and begin asserting what they know to be correct." The Consortium's third featured speaker, Catherine Haley, director of Design strategy at Lehman-Smith+McLeish, spoke of "The Office as an Organization." Her approach to design differed slightly from Moss's and Caan's in that she uses a systematic process to determine the majority's requirements for an interior space. She spoke of the necessity for designers to understand the "spirit of an organization," revealed through management's stated vision, mission, values, culture and essence, and comparing these findings to employees' experiences of the same. Her contention was that, "Work environments must support engaged employees, because engaged employees are critical to the success of an organization at all levels."Haley's process for getting to effective design involves three steps: measuring the ethereal, evaluating the intangible and creating the material. She explained that measuring the ethereal consists of conducting interviews with management, reviewing ad campaigns, and reading annual reports to "determine who it is the company says they are to everyone else." This is followed up with interviews and surveys of employees and former employees (when possible) who are asked to describe the company's culture from their own experiences. Employees and management are additionally asked carefully crafted questions about collaboration and information sharing to determine how space should be designed to accommodate each. Once all the data is gathered and analyzed, Haley explained, "We link the findings to space elements, compare the current environment to the ideal space, and then prioritize the organization's environmental wants. From that point, we create."In addition to the three featured speakers, the conference also included a presentation of design around the world by Ron Raetzman, International Consultant to Orfield Laboratories; a panel discussion featuring all of the presenters and other design professionals; and a case study of Harley-Davidson presented by Jeff Regner of Harley-Davidson and Tom Smith of Orfield Laboratories. A videotape of Corporate Consortium X is available on request from Orfield Laboratories and Haworth, Inc. The next Corporate Consortium will be held in October 2004. For more information, contact Christine Powers of Haworth at (616) 393-3198, your local Haworth sales representative, or Orfield Laboratories at (612) 721-2455. Increased Marketing Dosen't Guarantee ResultsLast year, the typical architecture, engineering, planning and environmental consulting firm spent a record 5.3 percent of their net service revenue on marketing, according to ZweigWhite's 2003 Marketing Survey of A/E/P & Environ-mental Consulting Firms. "Spending more on marketing, however, does not necessarily guarantee proportionate results," states Jim Duffy, an associate and marketing consultant with ZweigWhite, a marketing and management consulting firm serving the design industry. "In this competitive marketplace, firms need to be confident that every marketing dollar spent will generate results. Therefore, it is critical that a firm's marketing plan, processes and materials are current and targeted to clients' needs," says Duffy. To maximize return on marketing investments, Duffy recommends that marketing directors:
* Create a strategic marketing plan
. "Every marketing plan should include creative implementation items, including innovative uses of the firm's Web site, community and media relations programs, business development engagements and marketing positioning programs that are designed to reach past, present and prospective clients numerous times throughout the year with information they can use," says Duffy. * Scrutinize the marketing systems. "A marketing plan is only effective if a firm's database is comprehensive and current. Make sure the firm's communications are reaching the target audiences with updated lists of past, present and prospective clients. Media lists should be segmented into specific market sectors and kept current," adds Duffy.
* Be consistent
. "Branding is a critical outcome of marketing, and nothing boosts branding potential more that consistency. Newsletters, brochures, proposals and the firm's Web site should all present a consistent image. This means using the same logo, colors, fonts, and overall design on everything that leaves the firm," concludes Duffy.For more information, visit www.zweig Students Explore Power of Design Young women product designers at Parsons School of Design in New York, NY, are daring to change the world. In an industry known to be dominated by mostly men, 25 out of 39 graduating product design students—about 64 percent—were women. In this year's final exhibition, the senior class explored the notion of "A Good Life," in which students worked in collaboration with New York's not-for-profit community to design products that help improve the quality of life. What qualifies as "a good life?" How can life, liberty and the pursuit of happiness become globally accessible? How can access to knowledge, information and technology benefit the human race? Parsons students attempted to answer these and many other questions as they deliberated how to improve the quality of living through product design. "Unlike many other product design programs, our student body is made up of largely international and female students, which leads to non-traditional ways of thinking," says Product Design Department chair Tony Whitfield. "At the heart of our ambition is the desire to actively engage the power of design to change lives. These young women designers in this show have done just that." For example, designer Monica Dancu worked with Groove With Me, an East Harlem non-profit organization that provides girls with free dance classes as an alternative to negative behavior, to create X-tension, a fabric form that facilitates teamwork through interconnectivity. Danielle Spector's collaboration with the National Alliance for the Mentally Ill resulted in PERFECT, a collection of therapeutic housewares intended to help treat those with Obsessive Compulsive Disorder. Virginia Russell's Heartware, an interactive system that educates children about the practice of a heart-healthy diet and lifestyle, came out of her work with the American Heart Association, while Jenny Wong furthered Pop Sustainability's mission to popularize a more socially just, ecologically sound and economically viable society by raising awareness about sustainability. Her contribution? REfUSE, a line of handbags for teenagers that transforms ordinary plastic shopping bags into attractive hand-knit handbags.WEB TOOL HELPS IMPLEMENT GREEN DESIGN STRATEGIESOne of the biggest hurdles designers face in implementing sustainable design strategies is that they are overwhelmed by the amount of information available on green design. Not knowing where to start means that some designers are less likely to integrate sustainable design tenets into their projects. As a result, Ratcliff, an architecture, planning and interiors firm based in Emeryville, CA, has created and launched a new Web-based tool called the Green Matrix™ ( to assist the design and construction industry in plotting a course along the intricate path to build green. The Web site launch coincided with the firm's presentation at the EnvironDesign®8 conference in Minneapolis, MN, in April entitled, "Green Matrix: Navigating Green Design Resources.""As the design industry experiences a rise in our collective consciousness about building environments that are in harmony with nature, there has been a corresponding, tremendous rise in the amount of information on sustainable initiatives, technologies and products," says Christopher P. Ratcliff, president of Ratcliff. "We are attempting to put a rope around this multi-faceted discipline of green design and provide all the information in a manner that is easy to understand."The Green Matrix provides a comprehensive, chronological application of LEED guidelines from site selection and design through post construction. It cross-references topics of sustainability with the standard phases of project design, thereby illuminating appropriate strategies for a particular phase of work. Within the Green Matrix, there is a horizontal heading for the five typical sustainable topics: site, water, energy, materials and indoor environment. Vertically are listed seven design phases: pro-forma, master planning, pre-design, schematic design, design development, construction documents and construction/post occupancy. For example, a visitor to the Green Matrix Web site who is looking to present water-saving strategies to a client would click on the intersection of "master planning" and "water." Instantly, the user is redirected to a page deeper in the site that provides specific information on the strategies available to save water and further resource links.Ratcliff's Committee for Environmental Design Resources originally developed the Green Matrix four years ago as a poster to aid the firm's designers. The next step was to develop a CD-ROM, released in the summer of 2003, which incorporated links to the Web so designers could explore products and get answers. Over 2,000 CDs were distributed internationally and the response from registered users was so positive that Ratcliff took the next step and launched the new Web site.WINNER UNVEILED IN CALUMET COMPETITIONThe winner of the Ford Calumet Environmental Center (FCEC) Design Competition was unveiled in an Earth Day celebration at the Chicago Architecture Foundation. The team of Jeanne Gang and Mark Schendel, from Studio Gang Architects, Chicago, was one of five finalists that participated in the international green building design competition launched last fall by the Chicago Department of Environment, the Illinois Department of Natural Resources and Chicago's Environmental Fund. The competition jury is recommending to the City of Chicago that they commission the winner of the design competition to design the facility."This project is part of Chicago's Calumet Initiative, which is focused on rehabilitating the Calumet area's open spaces while simultaneously improving the economy," said Marcia Jiménez, commissioner of Chicago's Department of Environment. "The Ford Calumet Environmental Center design competition is a prime example of Mayor Daley's commitment to cultivating green design and innovative architecture in Chicago. The center will be an invaluable resource for our city and visitors from around the world."The FCEC will serve as an educational resource on the industrial, cultural and ecological heritage of Calumet while also acting as a hub for research, environmental remediation, ecological rehabilitation and volunteer stewardship. The FCEC is scheduled to open in 2006.The Studio Gang design, entitled "Best Nest," uses nest making as a metaphor for the team's approach to designing the sustainable building. The design uses a nest-like woven façade to prevent bird collisions with the building. Steel from the Calumet area is reused for the building's structural columns. The building and site are intended to form a dynamic system that engages the community. Additionally, the green building will target LEED status. During the first phase of the design competition in February, five finalists were chosen from a pool of 108 architects from seven different countries. Gang and Schendel were selected after review and deliberations by a high-profile panel of architects, landscape architects, a green building expert and a community representative.All finalists' models will be on display at The Chicago Architecture Foundation, 224 S. Michigan Ave., Chicago, from June 1 through September 12, 2004. There will also be posters displaying the finalists' work at several locations.

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