### Q3 2025 # Architecture Industry Insights This quarterly report highlights the trends and strategies architects need to address today’s challenges. From AIA leadership updates to key market data, it provides actionable, must-read insights to guide your practice and decisions. ## Topics ##### Q3 2025 National Billings ##### Month By Month Indicators ##### Regional Trends & Sector Snapshot ##### Economic Insights ##### Where to Watch in 2025 ##### Q3 Summary Curated by Ed Akins II, AIA, LEED AP Principal Architect, cove --- ## Q3 2025 National Billings ### FIRM BILLINGS WEAKEN, SIGNS OF STABILIZATION EMERGE Billings at architecture firms remained below 50 through Q3, signaling ongoing contraction in design activity. However, compared to earlier in 2025, the decline is more measured, suggesting firms may be approaching a turning point. - July: 46.2 — modest rebound after early summer slowdown - August: 47.2 — steady but still underperforming - September: 43.3 — softest reading since spring **OVERALL:** Work remains sluggish across most regions and sectors, inquiries indicate cautious client interest. --- ## Month By Month Indicators - Design Contracts | 43.2 - Project Inquiries | 45.6 ### KEY INDICATORS AT A GLANCE - July: Billings | 46.2 - August: Billings | 43.3 - September: Billings | 46.5 - Project Inquiries | 44.6 --- ## Regional Trends & Sector Snapshot ### REGIONAL TRENDS Midwest firms lead resilience as coastal regions lag. Firms in the Midwest continue to outperform, hinting at relative market stability. The West and Northeast lag behind, reflecting broader challenges in development financing and demand recovery. ### SECTOR SNAPSHOT - Institutional: 47.2 → 45.6 - Commercial/Industrial: 43.9 → 49.1 - Multifamily Residential: 43.5 → 46.9 --- ## Economic Insights Architecture firms faced ongoing headwinds in Q3 as interest rates, inflation uncertainty, and reduced public spending continued to suppress new project starts. Developers remain cautious, with funding delays and selective approvals slowing design pipelines. Growth opportunities are concentrated in renovation, modernization, and adaptive reuse. --- ## WHERE TO WATCH IN 2025 - Midwest and South may see early recovery next quarter. - Institutional sectors could rebound first, driven by public infrastructure funding. - Office retrofits remain a critical opportunity for billings stability. - Firms leveraging AI and operational analytics (for staff optimization and project forecasting) are positioned to weather continued uncertainty. --- # In Summary ## AIA ABI (Q3) – Declines Deepen, but Pockets of Stability Emerge Architecture billings fell again in Q3, averaging below 47, with September’s 43.3 marking the lowest reading since April. The Midwest held nearest to growth at 49.8, while the West dropped to 40.6—its weakest showing in over a year. Sector trends echoed this slowdown: - Commercial/Industrial steadied near break-even at 49.1 - Residential inched up to 46.9 - Institutional work declined further to 45.6 **Firms Pivot Toward Renovation and Efficiency** Backlogs slipped to an average of 6 months, continuing a gradual decline since 2022. Over half of firms reported active office reconstruction projects, emphasizing modernization, system upgrades, and adaptive reuse over new construction. Many are reallocating staff and resources across sectors to maintain stability amid fewer new project starts. ## What People Are Watching Client confidence remains weak following federal budget uncertainty and stalled inflation data. Private development will likely stay uneven, while renovation, repositioning, and reuse projects continue driving available work. Firms focusing on efficiency, diversification, and long-term planning are best positioned to weather the ongoing slowdown. --- # Meet the Expert ## Ed Akins II, AIA #### cove Principal Ed Akins II, AIA is an architect and educator with a passion for sustainable design and innovative thinking. A former Sustainable Fellow and Interim Chair of the College of Architecture and Construction Management at Kennesaw State University, he holds a Master of Architecture from Georgia Tech and has earned multiple industry accolades. ### Get Ahead of the Trends