The Royal Institute of British Architects (RIBA) has published its latest Future Trends survey, a monthly report of the business and employment trends affecting the architects’ profession.
It shows that, in August, architects overall felt slightly more downbeat about future workloads and staffing levels. However, small practices, whose workloads typically comprise a greater proportion of housing projects, were markedly less hopeful than their larger counterparts, who remain confident that their workloads will increase.
The pessimism among smaller practices appears to be driven by a further fall in confidence in the housing sector – now at its lowest since the pandemic. The outlook for most other monitored sectors improved.
While workloads were not expected to increase in any region of the country, practices in the South of England were the least pessimistic. Overall, workloads remain lower than a year ago.
There was a similar trend in expected staffing levels. While overall, practices expect a slight reduction in the number of permanent staff, this was driven by decreasing confidence among smaller practices. In contrast, medium and large practices continue to expect staffing to increase.
Optimism gap between small and larger practices widens
The RIBA Future Trends Workload Index fell by 1 point to -11.
Over the next three months, 18% of practices expect workloads to increase, 29% expect them to decrease, and 53% expect them to stay the same.
The outlook of small practices (1-10 staff) fell by 2 points to -17. Medium (11+ staff) and large (50+ staff) practices remain optimistic about future workloads, with a combined Workload Index figure of +24, an increase of 4 points compared to last month.
All four monitored work sectors still have a negative outlook on future work, but only one sector is less optimistic than last month. The outlook for the Public (-5) sector rose 10 points, the Community (-12) sector rose by 1 point, and the Commercial (-7) sector held steady. The outlook for the Private Housing (-23) sector fell by 10 points, now at its lowest level since the first Covid-19 lockdown.
Except for the South of England, the regional picture has further deteriorated, and no region has a positive outlook.
Slight dip in confidence in staffing levels, with larger practices upbeat
The RIBA Future Trends Permanent Staffing Index has fallen by 2 points to -2. This reflects a weak outlook for future work and continues the longer-term pattern of the Staffing Index hovering around zero.
- Over the next three months, 13% of practices expect to employ fewer permanent staff, 12% expect to employ more, and 75% expect no change.
- Medium and large practices (+24 combined Staffing Index) continue to expect an increase in permanent staff.
- Small practices (-6) continue to expect staffing levels to decline.
- Despite a falling workload outlook, Wales & the West (+7) and the South of England (+12) both anticipate growing staff levels. Falling staffing numbers are expected in the North of England (-11) and the Midlands & East Anglia (-8), and London (-6).
- The Temporary Staffing Index (-7) fell by 4 points, suggesting a reduction in temporary staff in the next three months.
- Levels of personal underemployment held steady at 22%.
RIBA Head of Economic Research and Analysis Adrian Malleson said:
“With rising interest rates making project financing more expensive and more difficult to obtain, the UK construction sector is weak and forecast to shrink this year.
This month's data reflects this downbeat context, with workloads expected to fall. The housing sector is the worst hit, with confidence in the sector at its lowest since the pandemic, affecting smaller practices the most. Larger practices, typically with a more diverse portfolio and less reliant on housing, are consistently more optimistic.
The RIBA Economics Panel explored this economic context in August; a summary is available here.
This month’s feedback from practices underscores the tightening market, particularly in domestic housing. Practices report significantly fewer new enquiries for residential projects, and existing projects being put on hold, as obtaining financing becomes more challenging for existing and potential clients.
Practices also report clients’ cash flow issues resulting in delayed payment for architects, planning delays still impeding project progress, and high-skilled staff remaining difficult to recruit and retain.
On a positive note, practices hope to see public sector spending increase in the medium term, and the commercial sector remaining more resilient than the housing sector. Practices continue to note that there is a global market for UK architectural expertise, with some reporting increased overseas demand.
We will continue to report our findings to the Government and work with other built environment bodies to monitor trends.”
Notes to editors:
- Media contact: Ruby.Oshea@riba.org
- Completed by a mix of small, medium and large firms based on a geographically representative sample, the RIBA Future Trends Survey was launched in January 2009 to monitor business and employment trends affecting the architects’ profession.
- 122 practices took part in the August 2023 survey.
- The survey is carried out by the RIBA in partnership with the Fees Bureau. Results of the survey, including a full graphical analysis, are published each month here.
- The definition for the workload balance figure is the difference between those expecting more work and those expecting less. A negative figure means more respondents expect less work than those expecting more work. This figure is used to represent the RIBA Future Trends workload index.
- The definition for the staffing balance figure is the difference between those expecting to employ more permanent staff in the next three months and those expecting to employ fewer. A negative figure means more respondents expect to employ fewer permanent staff. This figure is used to represent the RIBA Future Trends staffing index.
- To participate in the RIBA Future Trends Survey, please contact the RIBA Practice Department on 02073073749 or email firstname.lastname@example.org. The survey takes approximately five minutes to complete each month, and all returns are independently processed in strict confidence.
- 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.