Architecture Billings Index Nears 3.5 Years of Decline

The Architecture Billings Index came in at 46.6 for July, another reading below the line that separates growth from decline, and another month tacked onto what the American Institute of Architects now describes as the longest downturn in the measure's history. Firms have been stuck under that line for nearly three and a half years.

The number 50 is the whole story here. This is a diffusion score, not a dollar figure: above 50 means more firms billed more than they did the previous month, below 50 means more of them billed less. At 46.6, the majority of American architecture practices collected less revenue in July than in June — and they have been reporting some version of that same answer since early 2023.

Anyone outside the profession should still care, because architects draw buildings long before anyone pours concrete. The AIA treats this survey as a leading indicator for nonresidential construction, typically running nine to twelve months ahead of actual spending. A design slump this summer means fewer offices, schools, clinics and apartment blocks breaking ground in 2027 — and fewer construction paychecks attached to them.

How the Architecture Billings Index Actually Works

Run jointly by the AIA and the software firm Deltek, the survey asks a panel of US practices a simple monthly question about whether their billings rose, fell or held flat. The responses are converted into a score centered on 50. It has been collected since the mid-1990s, which is exactly why the current streak carries weight: there are three decades of comparison behind it.

One quirk matters. The index measures direction, not magnitude. A 46.6 does not mean revenue dropped 3.4 percent; it means the balance of firms tipped toward shrinking. A profession can bleed slowly for years without any single month looking dramatic, which is more or less what has happened.

Longer Than the 2008 Crash, and Not Close

The 2008 financial crisis produced a roughly 30-month slide in design billings, and for years that stood as the benchmark for how bad things could get. The current run has blown past it. AIA chief economist Richard Branch has described firms as mired in a stretch of more than 41 months without a majority reporting growth.

The texture is different, though. The post-2008 collapse was steep and violent — scores plunged into the low 30s and firms shed staff in waves. This one is shallow and grinding. Most months land in the mid-to-high 40s, which lets practices survive on thin margins and deferred hiring rather than mass layoffs. It is a longer illness with a milder fever, and arguably harder to plan around.

Where the Pain Is Worst Right Now

July was soft everywhere, but not evenly. Every region and every specialization posted a sub-50 score, which is unusual even within this downturn.

The Northeast Is the Softest Region

Northeast firms scored 44.8, the weakest region for a second straight month. The South held up best at 48.7, followed by the West at 47.8 and the Midwest at 46.7. The regional spread is narrow — under four points top to bottom — which suggests a national financing problem rather than a local one.

Mixed-Practice Firms Are Hit Hardest

Practices that spread work across several building types scored 43.2, well below everyone else. That runs against the usual logic that diversification protects you. When every sector softens at once, having a hand in all of them stops being a hedge.

Apartments Are the Least Bad Bet

Multifamily residential led at 48.4, with institutional work at 47.4 and commercial and industrial at 46.7. Housing demand keeps multifamily closest to the waterline, but "closest to breakeven" still means shrinking.

Clients Are Calling. They Just Are Not Signing

The most revealing pair of numbers is buried below the headline score. Inquiries about new projects came in at 52.6 — above 50, meaning interest is growing. Yet the value of newly signed design contracts fell to 47.2.

That gap is the story of this slump in two figures. Owners and developers are still sketching plans and asking for fee proposals. What they are not doing is committing capital. Branch pointed to broader conditions weighing on the sector:

Macroeconomic uncertainty continues to weigh on the built environment.

He also flagged high oil prices feeding inflation, which could keep borrowing costs elevated through the back half of the year. For a developer running the math on a $40 million mid-rise, a percentage point on the construction loan is often the difference between a groundbreaking and a shelved folder.

What to Watch Over the Next Six Months

The signal worth tracking is the contracts line, not the headline. Inquiries have flickered above 50 repeatedly during this downturn without translating into work. A sustained run of design contracts above 50 for two or three months would be the first honest sign that money is moving again, and it would show up in billings roughly half a year later.

If you are a homeowner, a small developer or a nonprofit sitting on a building project, this is an unusually good moment to shop the design phase. Firms have capacity, fee proposals are competitive, and turnaround times are short. If you work in the industry, watch federal and state rate signals this fall — that, not client enthusiasm, is what will finally push the index back over 50.