Environmental Analysis of the Architecture and Design Industry

Environmental Analysis of the Architecture and Design Industry

  • Submitted By: kramer
  • Date Submitted: 10/18/2008 6:27 PM
  • Category: Business
  • Words: 998
  • Page: 4
  • Views: 1

Environmental Analysis


In order to create an environmental analysis of the architecture and design industry, it must first be established which industry architecture and design is defined, what macroeconomic factors influence the industry, and identify challenges and opportunities that face the architecture industry. This paper will address and identify these issues.

Architecture and design operates under the professional services industry along with engineering and technical services. While architecture and design is often viewed as a commodity, in reality it is a service that creates value, through the design of innovative, functional, and energy efficient buildings that affect the architectural landscape for many years.

Like most industries, architecture is affected by economic conditions. In the late 1980s a slowdown in the industry resulted from a tax reform act that discouraged new construction, along with a lack of savings and loan capital. These factors contributed to a potential recession within the industry. This continued well into the early 1990s, as many firms were forced to close their doors. For those that remained, in order to compete for work, many firms reduced their staff through lay-offs as well as decreasing their fees to attract business. In the mid 1990s, business began to pick up as firms employed new technology to increase their competiveness as well as offering new services to clients. Business steadily increased until about 2005 within the housing market, due to personal income increasing and relatively low mortgage interest rates along with a large supply of buildable land. In the last year, housing prices have peaked, and mortgage loans started underperforming, forcing thousands into foreclosure. This has had significant impact on the economy. “The decline in residential investment subtracted about a percentage point from real GDP growth, and in the first quarter of this year, it lowered...

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