Washington— The latest report from the AIA/Deltek Architecture Billings Index (ABI) reveals continued struggles for architecture firms across the country. February’s score of 45.5 suggests that most firms are still experiencing a decline in billings, signaling persistent financial challenges in the industry.
This marks the latest in a series of setbacks for the architecture sector, with billings remaining weak in all regions of the United States. This decline was further compounded by a notable decrease in inquiries for new projects, a key indicator of future opportunities, which dropped for the first time since the height of the pandemic in 2020. Additionally, new signed design contracts fell for the twelfth consecutive month, as clients remain hesitant to commit to new projects amid ongoing economic uncertainties.
Despite these challenges, the broader economy showed more promising signs in February.
According to AIA Chief Economist, Kermit Baker, the Consumer Price Index (CPI) showed only modest increases, long-term interest rates eased from previous highs, and the job market remained strong. “While conditions in the overall economy were generally positive, the architecture sector is facing challenges that reflect broader concerns,” said Baker. “The recent announcement of tariffs and the potential rise in building material costs are concerning, especially with an already strained construction labor market due to immigration policies.”
Breaking down the performance by region and sector, the ABI report reveals the following:
-
Regional performance: The West led with a score of 48.1, followed by the South at 47.6, the Midwest at 45.2, and the Northeast trailing with 41.3.
-
Sector performance: Commercial and industrial sectors scored 46.9, institutional projects were at 46.4, and multifamily residential projects came in at 46.1. Mixed-practice firms, those without a dominant focus in one category, recorded a lower score of 42.1.
-
Project inquiries: The index for project inquiries was at 47.8, further reflecting a slowdown in new project interest.
-
Design contracts: The design contracts index was even lower, at 42.0, indicating continued hesitation from clients.
While the architecture industry is experiencing ongoing struggles, the broader economic outlook remains generally positive, though concerns about the impact of tariffs and material costs continue to cast a shadow over the sector’s future prospects. The ABI data suggests that the challenges are not isolated to any one region or type of firm, pointing to widespread difficulties in the architecture and construction industries.
As firms await signs of recovery, they remain cautious in navigating the uncertain terrain shaped by economic fluctuations, regulatory changes, and shifting market conditions.
