08-05-2025
Iowa architecture billings fall, signaling long-term slowdown
Architecture firms are experiencing a prolonged decline in invoices for upcoming projects, signaling ongoing challenges for the state's construction industry, according to the Iowa chapter of the American Institute of Architects (AIA).
Why it matters: Billings are closely tied to future construction activity, a significant driver of Iowa's workforce and overall economy.
With national and Iowa-specific data pointing down, the broader building sector could remain sluggish into 2026 and create significant obstacles for the local commercial real estate market, Iowa State University economist Peter Orazem tells Axios.
Driving the news: AIA's national billing index declined 27 of the last 30 months ending in March, according to the group's most recent report, released in late April.
In a separate market survey released this week by the Iowa chapter, 11 of 20 architectural firms (55%) identified the office market as their slowest, lagging behind about a dozen other sectors such as single-family housing and manufacturing.
Stunning stat: As of August 2024, construction employed nearly 86,000 workers and contributed billions of dollars to the state's gross domestic product, according to a report by the Associated General Contractors, an Arlington, Virginia-based group.
Zoom in: Hybrid work continues to reduce demand for commercial space, Orazem said.
The metro's office vacancy rates are lower than those in much of the country, but they have yet to return to pre-pandemic levels.
Businesses including Principal Financial Group have entire floors that are vacant.
What they're saying: With the general market trending downward and uncertainty regarding the availability of building materials, the industry's challenges will likely continue, Jessica Reinert, executive director of the AIA Iowa, said in a press release.
Orazem anticipates months of troubles due to office vacancies.
"Until you get enough growth to fill the available space, this will be a long-term issue," he said.
What we're watching: The city of DSM plans to sell three historic municipal buildings while the federal government is in the process of selling a long-standing U.S. Courthouse in downtown.
