|Volume 2, No. 14 - November 16, 2008
"It's the economy, stupid" - James Carville
The Economy of Greater Washington
by John McClain, Senior Fellow, Center for Regional Analysis
Office of Housing Policy Research at George Mason University
The anemic performance by the national economy in the first half of 2008 became more negative through the summer as damage from the housing/subprime mortgage problems escalated into more serious financial system problems. As the third quarter came to a close, the economic outlook for the next several months was very uncertain. Most economic indicators at the national level are down. However, as in recessions in the past, the Washington metropolitan economy continues to outperform most of the metropolitan areas in the country. A national recession has not yet been declared, but whether there is one or not, most of the country's major metropolitan economies are faring much more poorly, and are losing jobs. The Washington economy is actually doing quite well, all things considered.
National Economic Backdrop
In the 2nd quarter of 2008 GDP increased 2.8 percent which reflected the impacts of the stimulus package which reflects increased spending by consumers who got their stimulus checks in late spring. Against that indicator of economic expansion, however, most other indicators were in negative territory at the end of the 3rd quarter.
The Washington Region's Economy
- Housing continues to be a drag on the economy with both new and existing home sales in a negative trend, and information on foreclosures indicating serious problems in many parts of the country.
- National job growth has dropped from an annual average of 2.13 million new jobs in December 2006 to a loss of 600,000 jobs from September of 2007 to September of 2008. National job losses started showing up in June and losses have increased each month since then.
- The manufacturing index by the Institute of Supply Management declined to .43 in September indicating contraction of manufacturing activity at the national level.
- Initial claims for unemployment increased to levels well above what is considered normal, and the unemployment rate stood at 6.1 percent in September – up from 4.7 percent from September 2007.
- Consumer confidence measures dropped to historic lows in July, but had a slight uptick in August.
- The financial crisis resulting from the mortgage markets was addressed by the administration and Congress in September and a rescue package was passed. This legislative initiative is now at work and there is both hope and expectation that the actions will provide a start to providing some stability in the markets.
Against the environment of the national economic uncertainty as of fall 2008, the Washington economy continues to expand. For the past four recessions going back twenty-eight years, Washington’s Gross Regional Product did not turn negative in any of the recessions.
Most metropolitan economies are losing jobs on an annual basis as a result of economic conditions, particularly those markets that had the largest run-up in housing prices prior to the downturn, notably Los Angeles, Miami, Phoenix, San Francisco and Atlanta. New York's job growth has dropped from the 80,000 annual range to less than 35,000 (August data). Dallas and Houston - strong in the energy sector - are the only markets that have higher job growth than the Washington metropolitan area. Washington's job growth picked up in both July and August compared to the same months in 2007.
The Regional Housing Market
The housing market in Metropolitan Washington continues to adjust as prices are down although sales in some parts of the region have begun to increase. Key factors in the current housing market:
The Economic Outlook
- Inventory measures have improved from conditions in early summer and there are now fewer listings per sale compared to the same time last year.
- Prices of existing homes (all types) metro-wide are down 17 percent, although price levels inside the Beltway are much more stable than counties further out.
- Sales of houses are now increasing in most Northern Virginia jurisdictions, and especially in the outer counties. It seems that prices have fallen sufficiently in Prince William, Loudoun and Fairfax that buyers are moving from the sidelines to purchase homes.
It is likely that a national recession will have been declared sometime in the next several months. While there is great uncertainty about the outlook, recovery and expansion should begin slowly in the second half of 2009 and accelerate into 2010.
Given the partial insulation from recessions that has been experienced historically in Washington, it is very unlikely that the regional economy would enter a recession, although economic activity will slow down. Job growth is being sustained and is expected to continue.
John is a senior professional with over 25 years of experience analyzing the Washington region. For fifteen years he was at the Metropolitan Washington Council of Governments where he directed the planning and policy programs and economic and demographic forecasting programs for the Washington region. He helped establish and for several years directed the Cooperative Forecasting Program, which provided official forecasts for metropolitan and local planning programs in the region. Following this work with the public sector, John was a senior executive at the Greater Washington Board of Trade, where he directed policy and research programs for the region's business community. John received a BS in Civil Engineering from Duke University and a Masters of Regional Planning from the University of North Carolina at Chapel Hill.
Navigating the Economy Resource Center
The financial crisis and economic downturn are affecting architects, architectural firms, clients and AIA members. Everyone needs information and tools to help them deal with the current economic environment and fluctuating financial markets.
The AIA is providing practical resources to help you manage through these unprecedented times more confidently. These tools include web seminars with industry experts, weekly podcasts, articles, and events. In each issue, AIArchitect will have stories sharing the effects of the latest economic developments on members. We continuously strive to respond to members' needs and deliver the resources to help you deal with the challenges at hand.
Current information and helpful tools are available and constantly updated through the Navigating the Economy Resource Center on the AIA website. Recent articles include Surviving an Economic Downturn, Putting Panic in Perspective, Surviving the Crunch, Marketing Ideas for Small Architecture Firms, and In Hard Times, Don't Be Too Quick to Pull Layoff Trigger.
The Center provides links to weekly podcasts which offer expert professional and personal advice. Topics include Navigating the Economy, Managing Staff in Difficult Times, Insurance Needs and Concerns, Managing Finances, Job Security or Job Search, Dealing with the Credit Crunch, and Overseas Opportunities.
The AIA has also produced a 90-minute Webinar titled Strategies and Tactics for Architects in an Economic Downturn, which covers the overall picture, firm financial management, staffing strategies, and market positioning. Originally offered on September 24, the Webinar is now available here free of charge.
AIA Compensation Report : A Survey of US Architecture Firms
The AIA just released the 2008 Compensation Report, the most comprehensive source of compensation and benefits data available for the architecture profession. The report includes salary information for 40 positions, in 37 states, 41 metro areas and more than a dozen cities. The detailed data is presented by firm size, ranging from fewer than 5 employees to more than 250 employees and includes information on insurance, retirement savings, profit-sharing plans, leave time and much more.
The survey indicates strong gains in compensation for architecture staff positions, significantly outpacing compensation gains in the broader economy in recent years. According to the US Department of Labor, overall compensation gains in the private sector workforce increased about 19% from 2002 to 2008, while the AIA survey shows gains of almost 30% in the same six-year period. Average compensation for architecture positions increased more than 5.7% per year for the past three years, raising the average salary to more than $73,000 nationally. The report indicates that growth in non-residential construction is the primary reason for the gains and that Architect 1-3 positions and unlicensed design staff saw the greatest increases. Despite the recent strong increases, however, architect compensation remains below that of many comparable professions.
The report includes a wealth of information, including data on the difference in compensation between large firms and small firms, which regions of the country have the highest intern compensation, typical salary increases offered by firms upon registration, benefits most frequently offered by firms, and the average value of the benefits.
In the interest of sustainability, the report is available in PDF format only this year. The full, 152-page report is available for $195 for AIA members and $249 for non-members. Nine regional reports are available for $75 each for AIA members, $125 for non-members. To purchase a copy, click here to visit the AIA Bookstore.
AIA Northern Virginia Presents Chapter Honors, Elects 2009 Officers + Directors
At our annual dinner last Thursday evening, the Chapter honored seven distinguished colleagues:
Award of Honor – Steven H. Ruiz, AIA
Distinguished Leadership and Service – Valerie Hassett, AIA, IIDA, LEED® AP
Recognition of Service to the Chapter – Eliza Beth Engle, AIA, LEED® AP
Recognition of Service to the Chapter – Matt Shuba
Allied Professional – Sheng-Jieh Leu, RLA, Fairfax County Planning Division
Craftsmanship Award – James Lemke, J-N-L Wrought Iron, Inc.
Craftsmanship Award – Doug Clark – Clark’s Lumber + Millwork
We also held a brief meeting where attendees unanimously approved the new Chapter Bylaws and elected our 2009 Executive Committee, Chapter Directors & Virginia Society Directors. Our leaders for next year are:
President – Al Cox, FAIA
President Elect – Carolyn Rickard-Brideau, AIA, LEED® AP
Treasurer – Brian J. Donnelly, AIA, LEED® AP
Secretary – William T. Brown, AIA, LEED® AP
Vice President – Randall A. Mars, AIA
Vice President – Edward D. Weaver, AIA, LEED® AP
Valerie Hassett, AIA, IIDA, LEED® AP – Past President
Robert E. Beach, AIA
Francie K. Fetzer, Associate AIA, LEED® AP
David Jameson, FAIA
J. Paul Lewis, AIA, SCUP
Scott S. Matties, AIA
Derek J. Moore, AIA
John K. Mott, FAIA
Michael Nawrocki, AIA
Stephen A. Smith, AIA
Virginia Society AIA Directors:
William T. Brown, AIA LEED® AP
Paul R. Erickson, AIA
Randall A. Mars, AIA
Carolyn Rickard-Brideau, AIA, LEED® AP
Marlene Walli Shade, AIA, LEED® AP
Please watch for a complete summary of the annual dinner in the November/December issue of AIA Northern Virginia News.
Carlyle Westin Hotel + Jamieson Condominiums
Cooper Carry designed this 14-story full service hotel and luxury condominium in the Carlyle development located in Old Town Alexandria, Virginia, just blocks from the King Street Metrorail Station.
The 338,000-square-foot facility provides approximately 18,000 square feet of meeting space, 315 hotel rooms, and over 100,000 square feet of luxury condominiums. The facility is adjacent to the federal courthouse and approximately 4 million square feet of office space. The condominiums provide views of Old Town, the Potomac River, and beyond to the Capital. The project cost $65 million, and was completed in November 2007.
Cooper Carry / Washington specializes in mixed-use, urban infill projects for which the office has won numerous national and international awards. Led by principal David Kitchens, this office also offers significant practices in mixed-use, residential, hospitality and office.
Please join Chapter members in a tour of Cooper Carry's studio on November 10 at 6:00p. This is part of our Firm Tour Series, scheduled to coincide with our Chapter Board Meetings. Members are invited to participate in the board meeting and tour or just the tour. The board meetings begin at 4:30p, followed at 6:00p by a tour of our host firm, including a discussion about the firm and its recent projects.
One hour of AIA/CES credit is available for the tour and discussion. Reservations are not necessary. Cooper Carry is located at 625 North Washington Street, Suite 200, Alexandria, Virginia 22314. For more information on Cooper Carry, visit their website at www.coopercarry.com.
November 7 - Small Firms Roundtable Presents Green Buildings
Noon-1:00p, at the Chapter House, 205 South Patrick Street, Alexandria. Joan Kelsch, Director of Arlington County's Green Buildings program, will discuss all things green, including the county program. The Green Buildings program offers incentives to developers and homeowners while also providing assistance to architects and builders. The program assists with new construction, renovations, and building operations by promoting the use of sustainable materials, the recycling of waste, the reduction of energy consumption, and the use of environmentally friendly products, techniques, and behaviors. 1 AIA/CES HSW LU. Attendees are asked to contribute $5 for pizza and drinks at the event. Registration required by sending an e-mail to email@example.com.
November 8 - Builders Ball
6:30p, at the National Building Museum, 401 F Street, NW, Washington, DC. The Construction, Design and Real Estate Community invite you to the 2008 Builders' Ball. The Ball's proceeds benefit construction and design projects for Washington, DC area charities. For additional information and tickets, visit www.buildersball.org.
November 10 - AIA Northern Virginia Board Meeting
4:30-6:00p, At Cooper Carry, 625 North Washington Street, Suite 200, Alexandria. The meeting is followed by a tour of the firm. For additional information, contact the Chapter House at firstname.lastname@example.org.
November 10 - Cooper Carry Firm Tour
6:00p, at Cooper Carry / Alexandria, 625 North Washington Street, Suite 200, Alexandria. Tour the firm and learn about the design and construction of their new space, business practices and recent projects. Tour follows the AIA Northern Virginia Board Meeting. For a preview of their space, click here. 1 AIA/CES LU. Tour is free and registration is not necessary. For additional information on Cooper Carry, see their Featured Project in this issue of BLAST.
November 12-14 - Architecture Exchange East
At the Greater Richmond Convention Center. This year's ArchEx will be better than ever, featuring keynote speaker Craig Dykers of Norway's Snøhetta, architects of the Oslo Opera House and the Alexandria Library . More than 70 educational seminars will be offered ranging from historical preservation to the latest technologies. In the exhibit hall, more than 150 exhibitors will display the latest products and services. Additional information and registration is available at www.archex.net.
November 13 - 2006 Virginia Residential Code Update Training
8:00a-4:00p, at the Park West Lions Club, 8620 Sunnygate Drive, Manassas. Course is designed to help architects, builders and design professionals understand the significant code changes in residential construction as adopted by the 2006 Virginia Uniform Statewide Building Code. It will cover Building, Mechanical, Plumbing, Fuel Gas and Electrical codes. Organized by the Virginia Building Code Officials Association Region 5, the Virginia Plumbing and Mechanical Inspectors Association and the International Association of Electrical Inspectors. 7 AIA/CES HSW LUs. $100. For additional information and registration, contact Sean Farrell (703-792-5998; email@example.com) or Syndee Grace (703-324-1671; firstname.lastname@example.org). The course will also be offered on December 2 in Fairfax and December 11 in Falls Church. For additional information, visit the Chapter website and scroll down to see the calendar entries.
November 19 - AIA Northern Virginia Lunch Series : Find the Lost Dollars in Your Business
Noon-1:00p, at the Chapter House, 205 South Patrick Street, Alexandria 22314. This seminar will identify ways to find the lost dollars in your business. Can you answer the following questions that are critical to your business success? What is the dollar value of the time your employees spend looking for information, duplicating their efforts or using inaccurate data? How many dollars are lost due to inadequate tracking of critical client activities and correspondence? What is the amount of revenue lost by not capturing all billable revenue, low utilization or poor project management reporting? What is the value of lost project awards due to endless hours spent by your marketing staff trying to find accurate employee credentials and experience? Presented by June Jewell, CPA of Jewell & Associates. 1 AIA/CES LU. Free, but registration is required. Please e-mail your registration request to email@example.com.