by Calculated Risk on 7/23/2025 06:36:00 PM
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: ABI June 2025: Architecture firm billings remain soft, while inquiries increase
The AIA/Deltek Architecture Billings Index score was 46.8 for the month, indicating that the majority of architecture firms are still experiencing a decline in their billings. However, inquiries into new projects increased for the second consecutive month and grew at the strongest pace since last fall. This means that clients are starting to send out RFPs and initiate conversations with architecture firms about potential projects after a lull since mid-winter. However, these inquiries do not necessarily translate into actual projects, as the value of newly signed design contracts declined for the 16th consecutive month in June. It is unlikely that firm billings will return to positive territory until the value of new design contracts also starts to increase again.
Business conditions remained generally soft across the country in June, although firms located in the South reported a very slight increase in billings for the first time since last October. Firms in all other regions experienced a decline in billings, with the pace of the decline slowing modestly. Firms of all specializations also saw billings soften further in June, although the pace of the billings decline continued to slow at firms with commercial/industrial and institutional specializations. However, conditions remained weakest at firms with a multifamily specialization, where billings declined further this month.
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The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending activity. The score is derived from a monthly survey of architecture firms that measures the change in the number of services provided to clients.
emphasis added
• Northeast (46.5); Midwest (45.7); South (50.6); West (45.8)
• Sector index breakdown: commercial/industrial (47.4); institutional (49.2); multifamily residential (43.8)
Click on graph for larger image.
This graph shows the Architecture Billings Index since 1996. The index was at 46.8 in June, down from 47.2 in May. Anything below 50 indicates a decrease in demand for architects’ services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment throughout 2025 and into 2026.
Multi-family billings have been below 50 for the 35 consecutive months. This suggests we will see continued weakness in multi-family starts.
