Architectural Services NAICS 541310

Feb 20, 2026 - Architectural Billings Decline

• Demand for building design services declined in January from the prior month, according to a February report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 43.8 compared to December's reading of 47.1. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 49.3 in January from 52.9 in December, and the new design contracts index dropped to 42.7 from 47.5. January marked the first month since April 2025 that new project inquiries declined, as architecture clients remain cautious and new projects tended to be smaller in scale. All architectural specializations continue to face challenges, but multifamily has seen a slower decline than other segments of the industry.
• North American construction and engineering spending in 2026 is expected to grow by 1% after decreasing an estimated 1% in 2025, according to FMI’s first-quarter 2026 North American Engineering and Construction Outlook. Nonresidential building construction spending in 2026 is expected to be flat after decreasing an estimated 2% in 2025. Data centers will post spending growth of 23% in 2026 amid high demand for AI, but that will be offset by weakness in other nonresidential building segments, including warehouse (spending down 5% in 2026), commercial (-4%), lodging (-2%), and education (0%). The office market remains pressured by a record-high vacancy rate of 21%, according to Moody's Analytics. Healthcare construction spending is forecast to rise 3% in 2026 amid large hospital projects in several major metros. High mortgage interest rates and affordability constraints will contribute to a 5% decline in 2026 single-family construction spending. Supply gluts in some metro areas and tepid rent growth will reduce multifamily spending by 9% in 2026.

• Construction spending for nonresidential buildings is expected to remain sluggish in 2026 and 2027, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction is expected to rise just 1% in 2026 and 2.2% in 2027. For the next two years, commercial facility growth will be led by data centers, with spending rising 26.3% in 2026 and 16.5% in 2027. However, offices are expected to see a sharp decline in spending over the forecast period while warehouse and retail will see weak growth this year and modest gains in 2027. Manufacturing construction spending will fall 3.9% in 2026 and drop 2.8% next year. Spending on institutional projects will grow 2.7% this year and 2.8% in 2027, led by steady growth in the health sector, but educational, and amusement and recreation project spending will remain relatively flat.
• Design firm Gensler’s 2026 Design Forecast signals a major shift for the architecture industry, arguing that traditional measures of real estate value are giving way to experience, adaptability, and deeper integration of artificial intelligence, according to Architect Magazine. The report frames 2026 as a turning point that will require architects to design spaces that are flexible, emotionally resonant, and resilient to economic and climate pressures. It urges firms to embrace AI as a creative partner that can accelerate prototyping and reveal new behavioral insights in building occupancy. The forecast also calls for reimagining workplaces, hybridizing single use buildings, and prioritizing climate ready design. The report suggests that architectural firms will increasingly depend on blending data driven intelligence with human imagination.