Architectural Services NAICS 541310

Dec 20, 2025 - Dodge Momentum Index Drops

• The Dodge Momentum Index (DMI) decreased 1.1% in November 2025 to 276.8 (2000=100), up from the revised October reading of 280.0. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which has been shown to lead construction spending for nonresidential buildings by a full year. On a monthly basis, the commercial planning component declined by 0.1%, while the institutional component dropped by 3.4%. Dodge’s associate director of forecasting, Sarah Martin, said, "The influx of high-value data center work, compounded by inflationary cost pressures, continues to support elevated DMI levels. Overall, nonresidential construction is expected to strengthen in 2027, led primarily by data center and healthcare projects. Other nonresidential sectors are more likely to face softer demand and heightened macroeconomic risks."
• Demand for building design services declined in November from the prior month, marking the thirteenth consecutive month of weak architectural billings, according to a December report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 45.3 compared to October's reading of 47.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 51.4 in November from 54.8 in October, and the new design contracts index dropped to 42.7 from 47.1. The AIA’s Chief Economist, Kermit Baker said, "Weakness in business conditions at architecture firms continues to be widespread, with declining billings across all major specializations and in every region except the Midwest. However, inquiries for new projects continued to increase, and design activity at firms in the Midwest – a region that traditionally has had a disproportionate share of manufacturing activity – appears to have hit its bottom for this cycle and is expected to continue to improve."

• North American construction and engineering spending in 2026 is expected to rise 1% after decreasing an estimated 1% in 2025, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Multifamily construction is expected to decline by 2% in 2026, amid oversupply in some key markets and weak rent growth. Single-family construction is projected to rise by 1% in 2026, as stubbornly high interest rates and elevated home prices continue to reduce demand. Commercial construction spending is forecast to decline by 4% in 2026 as retail store closures surpass openings for the first time in a decade and warehouse vacancies remain high. Lodging construction is expected to decline by 2% in 2026, amid sluggish business travel growth and as financing conditions and maturing debt pose headwinds. Even as vacancy rates remain high, office construction spending is expected to grow 7% in 2026, driven by the expansion of data centers and the conversion of offices to multifamily use. Federal funding cuts are projected to result in flat educational construction spending in 2026, while healthcare projects are expected to see a 3% increase.
• Multifamily developer confidence improved in the third quarter of 2025 but remained in negative territory, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) rose six points in Q3 2025 to 46 compared to the third quarter of 2024. The Multifamily Occupancy Index (MOI) decreased by one point to 74 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. While the MPI index indicates weakness in the multifamily construction market, the softness is mostly concentrated in mid-to-high-rise and condominium development, while developers of low-rise and subsidized rental properties are more optimistic.