The architecture profession is still searching for solid footing amid a protracted economic slowdown. According to the latest data from the AIA/Deltek Architecture Billings Index (ABI), conditions in May remained soft across the country, although the pace of decline has moderated. The national score climbed to 47.2 from 43.2 in April—still below the threshold of 50 that signals growth, but a notable improvement after months of steep drops.
New project inquiries rose for the first time since January, with that index reaching 51.4, suggesting early signs of renewed client interest. However, that optimism was tempered by continued weakness in signed design contracts, which slipped further to 45.9. In other words: clients may be picking up the phone again, but they’re not yet ready to put pen to paper.
“Business conditions remained sluggish nationwide in May, with nonresidential construction activity continuing to decline in several major metro areas,” said Kermit Baker, PhD, Chief Economist at the AIA. “Firms across all specializations reported declining billings this month. However, the pace of decline slowed at firms specializing in multifamily residential projects. These, along with institutional work, are likely to be the first to return to growth when conditions begin to improve.”
Institutional and Multifamily Lead a Fragile Front
Among the major sectors tracked by the ABI, institutional work (46.2) and multifamily residential (46.1) fared better than others, though both remain in negative territory. Mixed-practice firms (45.4) and commercial/industrial firms (43.8) saw steeper declines.
Commercial projects, which were already strained by shifts in office demand and high interest rates, remain a particular pain point. The weak numbers reflect ongoing uncertainty in capital markets and real estate investment strategies, with many developers postponing or shelving new construction altogether.
Regional Woes Continue, But the South Holds On
Regionally, firms in the South (49.2) reported the mildest contraction, hovering just below breakeven. The West (44.3), Northeast (43.6), and Midwest (43.5) all continued to report significant billings declines. These figures are calculated using three-month moving averages, providing a broader snapshot of local trends.
The data paints a picture of a profession caught in a state of suspended animation—neither collapsing nor recovering, but grinding forward at a sluggish pace. While the Federal Reserve has signaled a possible easing of interest rates later this year, many architecture firms are still waiting for meaningful improvement in project pipelines.
Eyes on the Horizon
The recent uptick in inquiries suggests the demand pipeline isn’t entirely dry. Some sectors—particularly housing and institutional—may see a quicker rebound once economic confidence returns. However, the continued drop in design contracts signals that uncertainty is still the dominant mood among clients.
The AIA has encouraged firms to tap into its growing list of resources aimed at navigating this uncertain economy, from scenario planning tools to business continuity strategies.
For now, most firms are still playing defense, bracing for a long summer of cautious clients, delayed decisions, and slow recoveries.
