Architecture Firm Billings Continue to Tighten into 2025
Inquiries for new projects continued to rise at a steady pace, but the value of newly signed design contracts dropped for the eleventh month in a row
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Architecture firms reported another decline in billings in January as the AIA/Deltek Architecture Billings Index (ABI) was 45.6*. Any score below 50.0 indicates decreasing business conditions.
While most architecture firms saw billings decline in January, the proportion experiencing a decrease was slightly lower than in December. Inquiries for new projects continued to rise at a steady, slow pace, but the value of newly signed design contracts dropped for the eleventh month in a row, as clients stayed cautious amid ongoing economic uncertainty.
“Stubborn inflation, persistently high interest rates, and labor concerns continue to weigh on the willingness of owners and developers to move ahead with construction projects,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “Architecture firms have been moving to right-size their operations in response to softer market conditions. There was a net loss of 1,400 positions at architecture firms nationally in 2024, and firm employment has declined by a total of 4,100 positions since the post-pandemic peak in June 2023.”
Billings were soft across all regions and specializations in January. Firms with a commercial/industrial focus reported the most significant decline in business conditions, but weakness was observed across all sectors. Business conditions remained weakest in the Northeast, continuing a trend from recent months.
Key ABI highlights for January include:
• Regional averages: West (48.8); South (46.0); Midwest (45.6); Northeast (41.1)
• Sector index breakdown: institutional (47.4); multifamily residential (45.0); mixed practice (firms that do not have at least half of their billings in any one other category) (44.3); commercial/industrial (43.1)
• Project inquiries index: 51.4
• Design contracts index: 46.2
The regional and sector categories are calculated as three-month moving averages and may not always average out to the national score.
*Every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.
Visit AIA’s website for detailed information about this, and past billing index reports.
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