34 Questions
What is the main reason why architects need to adjust to economic cycles?
To maintain consistent workload
Why are architects particularly vulnerable to economic cycles?
Because they rely heavily on the construction sector for revenue
What was the overall trend in the construction sector during the past national economic expansion mentioned in the text?
Modest growth
How does the construction industry impact architects during an economic downturn?
It reduces demand for architectural services
Why do architects need to understand global economic trends according to the text?
To adapt to changing client preferences
During the period of extended growth in construction activity in the mid-1990s, how many years saw double-digit gains in nonresidential construction activity?
Four
What impact did the bursting of the tech bubble in the early 2000s have on construction activity?
Caused a mild downturn
What characterized the construction upturn from 2004 through 2007 following the early 2000s downturn?
Modest growth with no double-digit increases
How did the rapid decline in house prices nationally impact the international financial system?
Caused a near meltdown of the financial system
What would have exacerbated the impact of the Great Recession on the nonresidential construction industry according to the text?
Overbuilding in nonresidential construction markets
What critical challenge do architecture firms face due to the chronic volatility in project activity mentioned in the text?
Uneven revenue streams
During which phase of the business cycle is the rate of decline at its steepest?
Peak decline
Which industry tends to have fairly stable levels of activity across the business cycle?
Food and clothing industry
What is a characteristic of industries that are more influenced by business cycles?
They primarily rely on major expenditures
What happens to purchases of major expenditure items during periods of concern about business conditions?
They decrease substantially
Which phase follows the market peak when slow growth transitions to accelerating decline?
Early contraction
What contributes to the development of business cycles according to the text?
Pronounced business cycles in major expenditure industries
During favorable economic conditions, what is likely to happen to construction projects?
They are likely to be undertaken
What was one factor that contributed to a strong upturn in construction activity in the early to mid-1980s?
Tax code changes encouraging business investment
How did the collapse of the savings and loan system in the early 1990s affect construction financing?
It led to problems with financing both residential and nonresidential construction
What can be said about nonresidential construction based on Figure 7.7?
It either sees strong growth or strong declines most years
How does the text describe the construction industry's behavior during unfavorable economic conditions?
Fewer construction projects are undertaken
What characterizes the construction industry as described in the text regarding cyclical activity?
It is one of the most cyclical sectors in the economy
What is the primary purpose of the Architecture Billings Index (ABI) mentioned in the text?
To predict business conditions in the architecture profession
How are interest rates, lending standards, and loan volume connected to the decision-making process of owners and developers in construction projects?
They impact the financial feasibility of projects
In what way are housing indicators significant to architects as mentioned in the text?
They serve as a leading indicator for the broader economy
How does the Architecture Billings Index (ABI) help individual architecture firms?
By providing information on their business performance relative to peers
Why are architects considered well-positioned to report on the direction of the construction industry?
As a result of their close connection to economic cycles
What is one of the benefits of pursuing international projects for firms?
Benefitting from higher domestic growth rates
Why should architects consider diversifying their practice to include projects in rapidly developing areas?
To benefit from more vibrant construction industries
What is a risk associated with concentrating a practice on a limited number of building types?
Greater vulnerability to economic downturns
How do housing cycles typically relate to commercial/industrial cycles according to the text?
Housing cycles precede commercial/industrial cycles by 12-18 months
Why is it important for small and midsize firms to diversify their practice in terms of building types?
To reduce the risks associated with focusing on a few building types
How does the world economy's interconnectedness contribute to the need for building type diversification?
By increasing demand for a variety of building types
Explore how client decision making and approval processes impact the length of the design phase in architectural business management. This quiz covers factors such as financing, regulatory approvals, and funding that affect project timelines.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
