Architectural Services NAICS 541310

Oct 20, 2025 - Nonresidential Building Planning Improves

• The Dodge Momentum Index (DMI) increased 3.4% in September 2025 to 304.6 (2000=100), up from the revised August reading of 294.7. 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 improved by 4.7% and the institutional component increased by 0.9%. Dodge’s associate director of forecasting, Sarah Martin, said, "Planning momentum remained steadfast for data centers, healthcare, and public buildings throughout September and will correlate to stronger construction spending in early 2027. After a prolonged period of uncertainty, owners and developers are advancing projects into planning, but activity is expected to normalize in future months."
• Demand for building design services rose slightly in August from the prior month, but design demand remained in negative territory, according to a September report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) rose to 47.2 compared to July’s reading of 46.2. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries dropped to 50.3 in August from 53.4 in July, and the index for the value of new design contracts decreased from 47.9 to 47.2. August marked the 18th consecutive month of decline for new design contracts, the longest slump in the 15 years the AIA has collected data. However, the AIA’s Chief Economist, Kermit Baker said, "While business conditions remained soft at architecture firms nationally, there are signs that the downturn may be bottoming out. Inquiries for new projects have increased four straight months, and billings both at firms with a multifamily or commercial/industrial specialization are beginning to stabilize."

• Residential, commercial, and institutional construction segments face mixed prospects in 2025 and 2026, according to construction software and data firm ConstructConnect. Residential starts are expected to decline 7.7% in 2025, then rise 5.5% in 2026. Amid tariff uncertainty, tight credit, and persistently high inflation and interest rates, single-family starts are projected to fall by 6.9% in 2025, and multifamily starts will decline by 9.3%. In 2025, nonresidential building activity is forecast to increase 4.1%, led by large manufacturing projects, but as those projects wind down, manufacturing construction will drop about 40% in 2026. Institutional construction is expected to decline by 6.9% in 2025 as growth in the nursing home, public safety, and religious categories is offset by weakness in corrections and healthcare. Architectural firms will need to navigate volatile planning cycles, labor shortages, and shifting trade policy.
• In late August, President Trump issued an executive order mandating that all federal buildings, such as courthouses and public government buildings, feature classical architecture. The administration suggests the move will ensure that federal public buildings are uplifting and inspire respect for the US. The General Services Administration is tasked with creating policies to direct compliance by architects and administrators. In response to the order, the American Institute of Architects (AIA) issued a release opposing the move. The AIA argues the order will limit architectural choice while creating bureaucratic obstacles that slow project completion and increase costs.