In April the AIA’s Architecture Billings Index hovered close to 50—any score above 50 indicates an increase in billings. The monthly index that tracks business conditions for the industry has been sub-50 since January 2023. For May, rather than increasing above the coveted threshold, the index dipped to its lowest of the year: 44.5.

AIA Chief Economist, Richard Branch says the conflict in Iran and rising energy costs are to blame for the notable decrease in billings in May. The drop was also coupled with a dip in new design inquiries (after four months of growth) and a decrease in the value of newly signed design contracts, now at its lowest level since January.

“The uncertainty created by the Iran conflict, and substantially higher energy costs, weighed on architect billings in May,” Branch said in a statement. “Higher interest rates, rapidly rising material costs, and continued labor shortages all contributed to softer demand.”

Billings in the South were the closest to reporting increased growth, with a score of 49.6 in May. Firms focused on multifamily residential projects reported less of a decrease in billings than those working in institutional, commercial/industrial, and mixed practice.

In addition to sharing the billing index, the AIA also asked respondent firms to share their prospects of billings for the remainder of 2026. At the end of March, 21 percent of respondent firms said they expected their firm’s billings to decline by 5 percent or more in the second quarter of the year. Now, “one quarter” of firms expect their billings to decline in the third quarter. Additionally, 46 percent expect their billings to remain about the same, while 30 percent expect their billings to increase by 5 percent or more.

This week, President Trump and Vice President JD Vance contend their “interim deal” waged with Iran will alleviate some of the financial strain the conflict has caused on the United States and its economy.