Billings at architecture firms continued to decline in January. The start of 2025 continues a trend in softening business conditions that has been going on for the better part of two years now.The AIAs Architecture Billings Index reported a score of 45.6 for Januaryany number below 50 indicates a decline in billings. While this number is an improvement from Decembers, it signifies that the decrease in billings at architecture firms is happening at a slowed rate. As has also been the trend, inquiries into new projects continue to increase, meaning new work could be on the horizon for architects. This is coupled with a declining score for the value of design contracts, an indication that clients are less willing to reach deep into their pockets.AIA Chief Economist Kermit Baker again put the blame on inflation as a primary factor in the sluggish business conditions observed at architecture firms. He noted that as a result, firms have made cutbacks to positions at their practices.Stubborn inflation, persistently high interest rates, and labor concerns continue to weigh on the willingness of owners and developers to move ahead with construction projects, he said in a statement. Architecture firms have been moving to right-size their operations in response to softer market conditions. In addition to the regional average, the Architecture Billings Index also regularly reports on how four regions of the United States are faring. While in December billings in the West remained strong, they have since declined dropping from 52.2 to 48.8. The West still takes the top spot among all four regions, however, while the lowest again is the Northeast, reporting an index of 41.1, a dip from Decembers 41.1. As for the sectors architecture practices specialize in, no one sector appears to be faring that well as all again remain sub 50.January marks the first month of 2025, which saw a change of hands that ushered in a new federal administration which has already made sweeping changes to slash government departments and funding. The recent efforts by the executive office to defund federally backed programs could have drastic effects on the built environment and the projects and contracts architects work on moving forward. Stay tuned.