Economy

Architecture firms struggle through April
Written by Brett Linton
May 22, 2025
For the third month in a row, architecture firms reported a reduction in billings through April, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek.
The April ABI fell nearly one point month over month (m/m) to 43.2, the lowest reading in 11 months (Figure 1). The Index has indicated declining business conditions for most of the past two and a half years following the post-pandemic surge, remaining in contraction for all but two months since October 2022.
“Uncertainty as to the economic outlook continues to hold back progress on new construction projects,” said AIA chief economist Kermit Baker. “Despite the slowdown in billing activity, architecture firms continue to navigate this business cycle quite effectively, as staffing at firms remains relatively stable and project backlogs are holding up better than expected.”
The AIA/Deltek release also noted that many architecture firms are experiencing business conditions that resemble those of a recession.
The ABI is a leading indicator for near-term nonresidential construction activity and projects business conditions approximately 9-12 months down the road (the typical lead time between architecture billings and construction spending). An index score above 50 indicates an increase in architecture billings, while a reading below 50 indicates a decrease.

Participant comments this month included:
- “Economic uncertainty is leading to project delays and deferrals, as clients have questions about available funding and the ultimate cost of construction in a tariff-fueled materials environment.” -Western institutional firm
- “We have projects under construction, but not much work on the boards.” -Midwestern firm with commercial/industrial specialization
- “Interest in new work is picking up, but we do not expect to see notice to proceed until the third or fourth quarter.” -Southern residential firm
- “Almost 40% of our contracted projects have officially gone on hold or are unofficially paused.” -Northeast firm with mixed specialization
Subindex trends
The new project inquiries index marginally improved to 48.0, indicating contraction for the third-consecutive month. The design contracts index also inched up in April to 43.3, marking one full year of declining billings.
Each of the four regional indices declined from March to April, all remaining below the 50 threshold for the fourth straight month (Figure 2, left).
All four of the sub-sector indices saw a decrease in billings in April, though two improved from March (Figure 2, right). The residential, commercial/industrial, and institutional sectors are all at some of the lowest levels witnessed across the past five years.

An interactive history of the April Architecture Billings Index is available here on our website.

Brett Linton
Read more from Brett LintonLatest in Economy

Chicago Business Barometer catches cold winds of contraction in September
The Chicago Business Barometer's September reading indicates a softening in overall business activity in the Midwest for the third consecutive month, with new orders and backlogs retreating further.

Metalforming market sentiment takes a dive in September: PMA
Metalforming manufacturers anticipate a decrease in near-term conditions, according to the Precision Metalforming Association's (PMA) Business Conditions Report for September.

AIA: Architecture firms still under pressure
Architecture firms reported a modest improvement in billings through August, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.

US nonresidential construction down in August: Dodge
US nonresidential building starts fell 5.4% in August, to a seasonally adjusted annual rate of $431 billion, according to the latest data released by Dodge Construction Network.

CRU: Third of consumers put off purchases amid tariff upheaval, says Outokumpu
The analysis below was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com. One-in-three companies have paused or delayed stainless steel orders because of disruption caused by the wave of import duties imposed worldwide this year, according to a survey conducted for Outokumpu of Finland. Other responses include more […]