ABI November 2025: Architecture firm billings remain stagnant

Architecture firm billings remained soft in November

The AIA/Deltek Architecture Billings Index (ABI) score for the month remained well below the 50 level at 45.3 (a score over 50 indicates billings growth). This marked the 13th consecutive month of declining billings at architecture firms, and the 35th month of a score below 50 out of the last 38. Inquiries into new projects only increased modestly this month, and the value of newly signed design contracts continued to soften. Until work in the pipeline starts to pick back up, firms are unlikely to see a significant increase in their billings.

While business conditions at architecture firms have been soft in most sectors this year, the Midwest remained a bright spot in November. Billings increased at firms located in that region for the third consecutive month, and more firms reported growth this month than last month. However, billings continued to decline at firms located in all other regions of the country, particularly at firms located in the Northeast and the West. Firms of all specializations also saw billings continue to contract in November, although fewer firms with multifamily residential and institutional specializations reported declines than last month.

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Interest rates decline further amid weak job growth and lingering inflation

Conditions in the broader economy remain somewhat challenging to assess. As a result of the lengthy government shutdown, September employment data wasn’t released until mid-November, and October data will be skipped entirely, with the next release delayed and covering only November. September data showed nonfarm payroll gains of 119,000, a positive sign following recent losses. Architectural services employment also increased in August, according to the most recent data available, adding another 300 positions that month. However, with generally weak job growth overall so far this year and stubborn inflation lingering, the Federal Reserve lowered interest rates by another 0.25 basis points to the 3.50% to 3.75% range on December 10. Their target for inflation remains 2%, so they will continue to balance the need to support the jobs market while reining in inflation.

Increasing firm profitability remains the top business-related concern for architecture firms heading into 2026

Every December, we survey architecture firm leaders about their biggest business-related concerns for the coming year. This year, as in recent years, issues related to firm management and strategy, project management, marketing, and development topped the list of concerns. More than half of responding firm leaders rated the following as a major concern for 2026: increasing firm profitability (56%), identifying new clients and new markets/enhancing firm business planning/marketing (56%), and negotiating appropriate project fees (54%). In addition, 49% rated retaining current staff and maintaining competitive salaries/dealing with staff compensation expectations as a major concern, 48% rated developing future firm leaders as a major concern, and 46% rated maintaining relationships with longer-term existing clients as a major concern.

Of the issues they rated as a major concern for 2026, we asked responding firm leaders to select their top three business-related concerns for the coming year. The list is generally very consistent, with increasing firm profitability as the overall top concern, and this year was no different, with nearly one-third of firm leaders (31%) selecting it as one of their top three concerns for 2026. However, a new option that was added this year was the second most common selection, with 22% selecting developing future firm leaders as a key issue for the coming year. Competition was a greater issue this year, with 15% selecting dealing with competition from other architecture firms or other design professionals as one of their top three concerns, up from 12% in 2025. Hiring, on the other hand, was less of an issue, with the share of firm leaders selecting filling open staff positions and finding candidates to fill key positions at the firm as a top concern declining from 15% in 2024 to 10%, and the share selecting replacing key staff approaching retirement age declining from 11% to 6%.

Other issues that were more frequently cited as top concerns related to client relationships, with 9% selecting client challenges in the availability of project financing and higher interest rates as a top concern, 9% selecting maintaining relationships with longer-term existing clients, and 5% selecting working with challenging clients. Firms also cited concerns about issues that lead to construction delays, with 7% each selecting dealing with growing regulatory/environmental issues for construction and coping with costs and scheduling issues around cancelled, delayed, or redesigned projects as top concerns. And 8% of responding firms selected using artificial intelligence effectively in our practice as one of their top concerns for 2026, double the share that selected it as a top concern last year.

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This month, Work-on-the-Boards participants are saying:

• “Healthcare, our primary market, is typically busy at this time of year as clients look to us for budget numbers for planned work. So proposal activity is strong, but not all turns into real work.”—65-person firm in the West, institutional specialization
• “Uncertain about 2026 conditions. Architects and contractors appear steady, but pipelines are not as full.”—2-person firm in the South, commercial/industrial specialization
• “Things still feel a bit slow, although we’ve been pretty good most of the year. We are slightly worried about Q1, but if we get our normal signs in January/February, we’re going to be fine.”—2-person firm in the Midwest, multifamily residential specialization
• “Conditions are mixed. Clients are still adjusting to the ever-increasing costs of construction.”—12-person firm in the Northeast, commercial/industrial specialization