Yet Sector Still Contracting in 2025
The American Institute of Architects (AIA) and Deltek reported a modest improvement in their Architecture Billings Index (ABI) for May 2025, though the sector remains in contraction. The index rose to 47.2, up from 43.2 in April, marking a slower pace of decline. Any score below 50 signals a decrease in billings.
The uptick in May suggests fewer architecture firms reported falling billings compared to the previous month. However, the overall negative reading reflects continued softness in the design sector, which often serves as a leading indicator for nonresidential construction activity.
In a cautiously optimistic sign, the index tracking inquiries into new projects climbed to 51.4–its first positive reading since January–indicating that clients are starting to engage with architects about potential work. Still, the value of signed design contracts declined again in May, with that sub-index slipping to 45.9, underscoring lingering hesitation among clients to commit financially.
Kermit Baker
“Business conditions remained sluggish nationwide in May, with nonresidential construction activity continuing to decline in several major metro areas,” said Kermit Baker, chief economist at the AIA. “Firms across all specializations reported weaker billings, though the pace of decline is easing, particularly for multifamily residential firms. These, along with institutional projects, are likely to lead the rebound once market conditions improve.”
Despite signs of stabilization in client interest, the continued drag on signed contracts signals that the architecture and design sector remains cautious amid ongoing economic uncertainty.
Regional Breakdown (May 2025 ABI):
- South: 49.2
- West: 44.3
- Northeast: 43.6
- Midwest: 43.5
Sector Performance:
- Institutional: 46.2
- Multifamily Residential: 46.1
- Mixed Practice: 45.4
- Commercial/Industrial: 43.8
