by Calculated Risk on 10/22/2025 03:46:00 PM
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment including multi-family residential.
From the AIA: ABI September 2025: Weakness persists at architecture firms
The AIA/Deltek Architecture Billings Index (ABI) score of 43.3 for the month is the softest reading since April and represents an increase in the share of firms reporting a decrease from August. In addition, inquiries into new projects remained flat for the second consecutive month, following growth over the summer, and the value of newly signed design contracts decreased for the 19th consecutive month. All of these indicators mean that the soft conditions that many architecture firms have been experiencing since late 2022 are likely to persist for the foreseeable future.
Recent revisions to work in the pipeline continue to erode as well. In the aftermath of the pandemic-induced downturn in 2020, architecture firm backlogs reached the highest levels we have seen since we started collecting that data regularly 15 years ago. Backlogs have gradually declined since the third quarter of 2022 and currently stand at an average of 6.1 months, down from 6.5 months at the beginning of the year. Backlogs are averaging just five months at firms with multifamily residential and commercial/industrial specializations, but stand at an average of eight months at firms with an institutional specialization. But despite the recent decrease in backlogs at firms, they still stand at levels nearly comparable to those before the pandemic.
Billings declined at firms in all regions of the country in September, except for firms located in the Midwest, where billings were essentially flat. Billings were softest at firms located in the West for the fourth consecutive month, where they have weakened the most over the last year. By firm specialization, business conditions were weakest at firms with an institutional specialization this month and continued to soften at firms with a commercial/industrial specialization, which reported conditions approaching growth over the summer.
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The ABI serves as a leading economic indicator that leads nonresidential construction activity by approximately 9-12 months.
emphasis added
• Northeast (43.8); Midwest (49.8); South (47.9); West (40.6)
• Sector index breakdown: commercial/industrial (46.6); institutional (44.3); multifamily residential (47.2)
Click on graph for larger image.
This graph shows the Architecture Billings Index since 1996. The index was at 43.3 in September, down from 47.2 in August. Anything below 50 indicates a decrease in demand for architects’ services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
This index usually leads CRE investment by 9 to 12 months, so this index suggests a slowdown in CRE investment throughout 2025 and into 2026.
Multi-family billings have been below 50 for 38 consecutive months. This suggests we will some further weakness in multi-family starts.
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