The RIBA Future Trends Workload Index recovered some lost ground in the latest July survey, while large practices appeared to be brushing aside any short term uncertainties in a swell of optimism over improving prospects.
Following the 13 point fall in the headline index recorded in June, when the balance of practices expecting workload to increase had fallen back to +10, the July index added four points to stand at +14.
But large practices, having been just marginally more optimistic than others in recent months, saw their own workload balance figure leaping ahead to +63, opening up a clear gap between their medium-sized peers at +15 and small practices at +11.
The gap was mirrored by large practices’ expectations of staffing increases, where again the balance of practices expecting to hire rather than fire stood at +63, dramatically ahead of the overall Staffing Index at +10.
All of the work sectors monitored in the survey saw improvements in July. The private housing sector forecast staged a good recovery from its dip the previous month to stand at +17. The commercial sector workload forecast was also moving up once again at +8.
The community sector forecast also crept back into positive territory at +1. The biggest riser was the public sector, which rose to +3, its highest figure for 12 months.
Forecasts from other leading industry surveys all agree that private housing activity continues to be robust, with growth recorded over the summer. But they point to other sectors, particularly commercial, weakening the general upturn.
The closely-watched HIS Markit/CIPS UK Construction report for August saw growth slipping back to the lowest level seen for a year, with commercial work dropping at the fastest rate since July 2016 amid reports of clients opting to delay spending decisions and, in some cases, scale back planning projects.
The Construction Products Association says order books are being sustained by private housing and R&M work, but are falling in commercial and industrial sectors due to rising costs and a near-term outlook clouded by Brexit uncertainty.
Meanwhile, the value of actual work in progress reported by practices participating in the RIBA survey continues to grow at a modest annualised rate of 1%.
RIBA Executive Director Members Adrian Dobson says commentary received from participating practices suggests a generally steady outlook in the medium term, but more unpredictability in the longer term outlook.
‘Some of last month’s pessimism seems to have lifted, but signals remain mixed,’ says Dobson.
‘Some practices have detected nervousness on the part of developers of larger residential schemes. At the same time we have had the first reports for some time of practices struggling to recruit staff with the skills they need.’
Looking at the regions, practices in the North of England (balance +26) and the Midlands and East Anglia (balance +32) were more optimistic about medium term workload prospects in July than practices in the South of England (balance +17).
Ruling out any suggestion that the optimism reported by large practices might be a London phenomenon, practices in the capital were by far the most cautious about workloads, with a negative balance of -2.
Text by Neal Morris. This is a ‘Practice News’ post edited by the RIBA Practice team. The team would like to hear your feedback and ideas for Practice News: firstname.lastname@example.org.
Posted on 7 September 2017.