Industry News

Architecture firms remain in prolonged downturn despite June improvement

AIA/Deltek billings index rises, but extends 41-month stretch below growth
Line chart of the AIA/Deltek Architecture Billings Index from June 2025 through June 2026 showing three trend lines: billings, design contracts, and project inquiries. A horizontal line marks the growth threshold at 50, with billings remaining below that level throughout the period.
The AIA/Deltek Architecture Billings Index shows billings improved in June 2026 but remained below the growth threshold of 50. Design contracts were essentially flat, while project inquiries increased.

The AIA/Deltek Architecture Billings Index score for June 2026 was 47.3. While this is nearly three points higher than the May score—where the ABI score fell to its lowest level since January—it still indicates that a majority of firms reported a decline in billings, albeit fewer than last month.

The ABI is a leading monthly economic indicator based on billings at U.S. architecture firms that uses AIA data to predict nonresidential construction activity 9 to 12 months in advance.

ABI scores greater than 50 indicate growth, while scores below 50 indicate contraction.

Architecture firms remain mired in one of the longest-running downturns in the 30-plus year history of the ABI, said AIA, which now stretches to 41 months without a majority of firms reporting billings growth.

The value of newly signed design contracts was just slightly below 50, meaning they are essentially flat, with an almost equal share of firms reporting a decline as reporting an increase.

Backlogs also edged lower in the second quarter, slipping to an average of 6.3 months from 6.6 months in the first quarter. The sharpest decline occurred at firms with annual billings under $250,000, where backlogs fell from 4.9 months to 3.1 months.

Firms specializing in multifamily residential projects also saw backlogs decline, from 6.2 months to 5.3 months. While larger firms generally maintained steady backlogs, AIA said smaller firms may be working through existing projects faster than they are replacing them, leaving them more vulnerable if business remains slow.

Billings also declined at firms across all regions of the country in June, except in the South, where billings were essentially flat. Business conditions in the Midwest continued to soften further after slight growth in the fourth quarter of 2025.

Firms of all specializations also reported declining billings for the second month in a row. Firms with a multifamily residential specialization have seen the greatest drop after experiencing more stable conditions earlier this year.

Architectural services employment shed 300 jobs in May (the most recent data available), and is down 1,100 positions from this year’s peak in February.