Architecture Billings Remain Flat, Inquiries Provide Hope
2025 Outlook: Profitability and fee negotiations are key priorities for many firms
THE MOST RECENT REPORT: December 18, 2024
WASHINGTON – The AIA/Deltek Architecture Billings Index (ABI) dipped slightly below 50 for November. The November AIA/Deltek ABI score of 49.6 changed little from October’s score of 50.3, indicating that the share of architecture firms that reported declining billings was essentially the same as the share that reported increasing billings. Any score below 50.0 indicates decreasing business conditions, but there are encouraging signs of the pipeline.
The return of billings to a stable level after nearly two years of decline signals potential improvement across the industry. Additionally, inquiries into new projects are steadily increasing, demonstrating sustained interest in future work opportunities. However, newly signed design contracts have experienced an eighth consecutive month of decline, suggesting that a more robust upturn in design activity is still distant.
“Given the extended weakness in business conditions at architecture firms, increasing firm profitability remains the top concern for 2025, with one-third of firm leaders selecting it as a major issue—the highest since 2017,” said Kermit Baker, PhD, AIA Chief Economist. “Negotiating appropriate project fees ranked second, chosen by 21 percent, while 20 percent identified finding new clients and markets or improving business planning and marketing as a top concern, up from 18 percent last year.”
Key ABI highlights for November include:
- Regional averages: West (54.3); South (50.0); Midwest (48.1); Northeast (46.9)
- Sector index breakdown: multifamily residential (50.8); institutional (50.6); commercial/industrial (49.4); mixed practice (firms that do not have at least half of their billings in any one other category) (48.5)
- Project inquiries index: 54.1
- Design contracts index: 48.3
Regional and sector categories are measured as three-month moving averages and may not align with the national score.
Inside Lighting strives to accurately report certain data on the day it is reported by the AIA, but updates to past data with new three-month rolling averages might not be made. For official and most current reports, refer to the AIA ABI numbers. All ABI data is sourced from the AIA.
Interpreting the ABI:
The Architecture Billings Index (ABI) is a leading economic indicator of construction activity. It is produced by the American Institute of Architects (AIA) and it reflects the approximate nine-to-twelve month lead time between architecture billings and construction spending.
The ABI is based on a monthly survey of architecture firms that asks respondents to rate the level of their billings (or the amount of new design contracts) as either "increase," "decrease," or "no change" from the previous month. The results are then compiled into an index, where a score above 50 indicates an increase in billings, and a score below 50 indicates a decrease in billings.
The ABI is widely used in the construction industry, as well as by economists and analysts, to track the health of the construction market and to forecast future building activity. It is considered a leading economic indicator because changes in architecture billings often precede changes in overall economic activity, such as employment and GDP.
The ABI provides a snapshot of the demand for design services as well as an indication of the near-term outlook for the construction industry.
The survey panel asks participating architectural firms whether billings increased, decreased or stayed the same in the month that just ended. According to the proportion of respondents choosing each option, a score is generated, which represents an index value for each month.
- An index score of 50 indicates no change in firm billings versus the previous month.
- A score above 50 indicates an increase in firm billings versus the previous month.
- A score below 50 indicates an decrease in firm billings versus the previous month.
- NOTE: Index numbers cited for the last three reported months are preliminary.
- The regional and sector categories are calculated as a 3-month moving average, whereas the national index, design contracts and inquiries are monthly numbers.
Source: The American Institute of Architects (AIA)
National Architecture Billings Index
Source: The American Institute of Architects (AIA)
RELATED: Historical ABI Data 2008 - 2022 »
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Regional Architecture Billings Index
(Three month rolling average)
Source: The American Institute of Architects (AIA)
Sector-Specific Architecture Billings Index
Three-month rolling average
Commercial/Industrial
Buildings related to commerce and industry. Office space, banks, retail, factories, etc.
Institutional
Schools, civic/government buildings, museums, hospitals, etc.
Multifamily Residential
Town homes, apartment complexes, condominiums, etc.
Mixed Practice
Firms that do not have at least half of their billings in any one other category.
Source: The American Institute of Architects (AIA)
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