The latest Future Trends Survey by the Royal Institute of British Architects (RIBA) has revealed that architects are facing a further drop in overall workload levels, marking August as the sixth consecutive month in which they have fallen.
The number of practices expecting a growth in workload dropped a total of 8% since June, (19% in August, 25% in July, and 27% in June); 29% of practices expected workload to decrease in August, compared to 25% in June (28% in July). There continues to be little evidence of a recovery in employment prospects for salaried architects, with only 4% of practices expecting an increase in staff in August, compared to 8% in July. However, fewer respondents (25%) stated that they were personally underemployed in August, compared to 27% in July.
The survey also revealed that practices continued to be less optimistic about forecasted workload predictions in the commercial and private housing sectors. The greatest decline was visible in private housing, which saw a 7% decline in the number of architects expecting more work in the sector (19% in August, compared to 26% in July), however 68% expected workload levels to stay constant, an 8% rise on July's figure of 60%. The number of firms expecting commercial sector work to decrease rose to 26%, a 7% increase on July's forecast of 19%. Public sector work was the only sector to fare better, with more firms expecting workload to rise (7% in August, compared to 4% in July); only 39% of practices expected workload to decrease in August, compared to 42% in July.
The statistical analysis of the survey enables the RIBA to regularly report on two key confidence tracking indices relating to future workloads and staffing levels. For August 2010, the RIBA Future Trends Workload Index is -10 (compared to -4 in July 2010) and the RIBA Future Trends Staffing Index is -14 (compared to -8 in July 2010).
"The RIBA Future Trends Workload Index for August 2010 is -10, down from -4 in July 2010. This further decline means that this is the sixth consecutive month in which this Index has fallen, and the extension of this trend reinforces our conclusion from last month's results that we are likely to see a further reduction in work in progress over the next quarter," said Adrian Dobson, RIBA Director of Practice. "Medium size practices (11 - 50 staff) continue to be the most pessimistic about their future workload prospects (balance figure -36). Confidence levels in Scotland and Northern Ireland continue to be particularly low, but there are also signs of a significantly softening market for architects' services in the Midlands and East Anglia (balance figure -29).
The market for bespoke houses and domestic extensions seems to be continuing to hold up well in many areas, but a number of our correspondents have expressed concern about the potential impact of the planned VAT increase and many are expressing the need for interest rates to be kept at low levels in the medium term. There is also evidence of increased fee competition in this sector. A sustained recovery is likely to be led by the commercial sector, and we will be watching closely for the first signs of this sector forecast returning positive figures
It is perhaps not surprising, given that one quarter of our respondents report being personally under-employed, that reduced hours working continues in some practices. The current over-capacity in several sectors is leading to intense fee competition, and practices have to analyse the resource requirements of projects and the scope of services very carefully to ensure that they can successfully deliver projects and cover costs. During the last major recession in the UK construction industry many practice failures actually occurred in the recovery phase as a result of unrealistic fee bidding and some unsustainable fee levels."