The Royal Institute of British Architects (RIBA) has published its annual Business Benchmarking report. Tracking business trends across UK architecture practices, relating to pay, areas of work, revenue, expenditure, and profitability, the report also surveys global growth areas for the export of UK architecture expertise.
This year’s report assesses the 12 months to 1 May 2022, reflecting how RIBA Chartered Practices have fared following the shock of the Covid-19 pandemic and the post-lockdown bounce-back.
The 2022 report shows revenue holding steady (up by 1% from 2021), similar levels of profit and an increase in staff numbers. Whilst there has been limited growth in the sector, the stability is positive, given the ongoing turbulence in the wider economic climate – encompassing steep inflation, labour and materials shortages, and spikes in energy costs.
Key trends revealed in the 2022 RIBA Business Benchmarking report include:
- Total revenue from all RIBA Chartered Practices is up 1% from last year to £3.1 billion
- Staff numbers are up by 17%, returning to pre-pandemic levels, although average salaries remain very close to those of 2021 for almost all categories of staff.
- At 61%, payroll remains the biggest expenditure for practices. In the past year expenditure on rent and premises has continued to fall, down from 7% of expenditure in 2021 to 6% this year, reflecting the cost savings of the more permanent adoption of hybrid working.
- Whilst revenue from overseas work has dipped slightly, UK architecture remains a global powerhouse, with RIBA Chartered Practices exporting over half a billion pounds of architectural services, in the past 12 months. Asia has overtaken the Middle East as the most significant source of international work.
- Revenue is almost evenly split three ways between the private housing, commercial and public sectors. Smaller practices' revenue continues to be dominated by the private housing sector, comprising 70% of revenue of practices with fewer than 5 staff. Larger practices generate their revenue from a wide range of sectors. In the largest practices, 100+, no single sector accounts for more than 15 per cent of revenue. For these practices, offices and mixed projects are among the most significant sources of work.
- Surveying Professional Indemnity Insurance cover for the first time - the report shows average cover for all practices is £2 million, rising to £10 million in larger practices (20+ staff). The cost of cover continues to increase.
- Following a period of sustained progress across the profession to address issues of equity, diversity and inclusion (EDI), this year's figures indicate this has stalled. EDI activity and support is greatest in larger (100+) practices, but over 50% of all practices still do not have staff training in place to improve EDI.
- As part of this survey, some large (100+) practices volunteered to submit data on ethnicity and gender pay gaps in their practices. From this group, both the gender (from 15% to 17%) and ethnicity (from 14% to 21%) pay gaps have widened since 2021. Female staff continue to be under-represented in the highest quartile of incomes and over-represented in the lowest. The pay gap remains in favour of white staff. However, for many staff levels, the pay gap is in favour of non-white staff. Non-white staff are under-represented in the highest quartile of incomes and over-represented in the lowest quartile.
RIBA Head of Economic Research and Analysis, Adrian Malleson said:
“This year’s findings show some signs of recovery and stability – demonstrating the resilience of UK practices, and their ability to rapidly adjust to unprecedented changes.
But it’s no boom-time. The market continues to grapple with numerous challenges ranging from materials shortages and price increases to a scarcity of tradespeople and labourers, and a smaller pool of architectural talent, post-Brexit.
The coming 12 months are likely to present more challenges. With a two-year-long recession forecast, growth is unlikely to return to the UK economy until late 2024 or early 2025. We can expect the construction sector to feel the impacts of this.
With public spending set to be cut, RIBA continues to promote the importance of a sustainable design-led renewal of the built environment. Better houses, schools, hospitals alongside rejuvenated town and city centres are required. Investing in the built environment will increase economic productivity, benefit our communities, and help secure the county’s long-term success.
Part of this success is ensuring that we all work towards creating and sustaining a more equitable, diverse and inclusive profession. RIBA will continue to drive change within our own organisation, and also mobilise the profession to play its part too. We will continue to work with practices to commit to and deliver on this in the coming months – supplying targeted resources and support.
Through ongoing research and consultation, we are actively monitoring trends and opportunities on behalf of our members as they navigate the forthcoming months and years. Adaptation and innovation in the way architects conduct business will be key to maintaining resilience in turbulent times. We will continue to offer high quality support to all our members, helping them to thrive wherever they live or work.”
- Media contact: Isabel.Campbell@riba.org
- RIBA Business Benchmarking Survey information is collected from RIBA Chartered Practices and analysed in confidence by our project partners at The Fees Bureau and MRM Solutions.
- The Royal Institute of British Architects (RIBA) is a global professional membership body that serves its members and society in order to deliver better buildings and places, stronger communities and a sustainable environment. Follow @RIBA on Twitter for regular updates.