by Calculated Risk on 5/21/2025 01:01:00 PM
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: ABI April 2025: Billings continue to decline at architecture firms
The AIA/Deltek Architecture Billings Index (ABI) score declined to 43.2 for the month. Billings have declined for 28 of the last 31 months, since they first dipped back into negative territory following the post-pandemic boom. Despite generally strong backlogs at firms, inquiries into new work declined for the third consecutive month in April, while the value of new design contracts declined at the majority of firms for the fourteenth consecutive month. Although the U.S. economy is not officially in a recession at this time, many architecture firms are reporting recession-like business conditions.
Regionally, business conditions at architecture firms remained softest at firms located in the Northeast for the seventh consecutive month in April. Conditions have also softened significantly at firms located in the West since the beginning of the year. In addition, billings continued to decline at firms of all specializations this month, particularly at firms with commercial/industrial and multifamily residential specializations. The pace of the decline remains slower at firms with an institutional specialization, but billings have still declined nearly every month since mid-2023.
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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 (40.2); Midwest (44.4); South (46.2); West (42.1)
• Sector index breakdown: commercial/industrial (40.5); institutional (46.3); multifamily residential (40.8)
Click on graph for larger image.
This graph shows the Architecture Billings Index since 1996. The index was at 43.2 in April, down from 44.1 in March. 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 33 consecutive months. This suggests we will see continued weakness in multi-family starts.
