Architecture Firms Face ‘Subdued’ Business Conditions in the New Year

As far as business conditions at architecture firms go, 2026 is far from kicking off with a bang. The latest AIA/Deltek Architecture Billings Index (ABI) shows a decline in billings firms nationwide in the first month of 2026 compared to December 2025, with the score dropping from 47.1 to 43.8. (Any score below 50.0 indicates softening business activity.) The December score, revised to 47.1 from the original 4.85 after being released last month, was notably high—roughly the highest since November 2024— even though remaining “soft.”

Image courtesy AIA

Per the latest report, inquiries for new projects dropped for the first time since April 2025. Also on the decline were newly signed design contracts as “client uncertainty persisted and new projects tended to be smaller in scale.”

"Overall economic conditions remain subdued, with revised 2025 employment data revealing smaller gains than anticipated and nonfarm payrolls increasing by just 130,000 in January 2026,” said AIA chief economist Richard Branch, who replaces longtime chief economist Kermit Baker following his retirement. Prior to joining the AIA, Branch was chief economist for Dodge Construction Network.

"That said, construction employment was a bright spot, adding 33,000 jobs, including 25,000 in nonresidential specialty trades, signaling a positive shift after stagnant growth last year,” Branch adds. “Architectural services also showed resilience, with a net gain of 1,300 positions in 2025 despite early declines and a slight dip in December."

Image courtesy AIA

Looking at billings region-by-region, the South made a leap into positive territory with a score of 50.2, up from 47.7 in the December ABI. The Midwest, which experienced growth late last year, sank from its previous score of 51.7 to 46.3. The West and Northeast also remained soft with scores of 46.3 and 42.3, respectively.

Image courtesy AIA

In January, business conditions firms across all specializations remained “challenging” per the ABI. Firms focused on multifamily residential (48.4) saw the slowest rate of decline but no growth since mid-2022.