Architecture Firms Close Out 2025 in a Soft Spot
As anticipated, business conditions at architecture firms nationwide remained in decline during the final month of 2025. Per the latest AIA/Deltek Architecture Billings Index (ABI) there was, however, an uptick in activity from November with a reported score of 48.5 compared to the previous month’s 45.3. (Any score below 50.0 indicates softening business activity.) On the bright side, 48.5 is the highest ABI score since November 2024 when the ABI nearly crossed over from negative territory with a score of 49.6.
As detailed in the latest AIA/Deltek report, firm billings declined throughout all of 2025 and most months since October 2022, with just three exceptions. While fewer firms reported a decrease in December, declining design contract values suggest a near-term rebound is unlikely. However, firm backlogs remain strong, averaging 6.3 months. Large firms with annual billings of $5 million or more report backlogs of 8.6 months, while institutional specialists average 8.2 months. Despite a decline in project inquiries and the value of newly signed design contracts, work pipelines have remained stable.
Image courtesy AIA
“Despite the ongoing decline in billings at most architecture firms, there are a few signs of potential improvement on the horizon. The number of inquiries into future project work continues to grow, and Midwest firms saw billings increase for the fourth consecutive month in December,” explained AIA chief economist Kermit Baker, offering touch of optimism in the new year. “In general, however, overall conditions remain weak across all specializations. Multifamily residential firms faced the steepest declines, while institutional firms experienced a slightly slower pace of decline compared to earlier in the year.”
Image courtesy AIA
Image courtesy AIA
Looking at regional averages, firms based in the Midwest—as mentioned by Baker—enjoyed growth with a score of 51.7, slightly down from the previous 52.3 but still in positive territory. Other regions continued to experience a softening, particularly the Northeast with a score of 44.2.
In December, business conditions at firms of all specialties remained weak: Institutional (48.7); commercial/industrial (47.8); and multifamily residential (45.5); Mixed practice firms that do not have at least half of their billings in any one other category scored 44.0.
As the AIA enters a new year under new executive leadership, a reminder that the organization and its 200 chapters provide resources to architects and firm owners to help navigate economic uncertainty.
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