Large practices the most optimistic in two years

Practices are confident about workloads and staffing levels despite a slide in optimism from smaller firms, according to RIBA鈥檚 latest Future Trends survey.

Firms which employ 10 staff or less returned an index figure of -6 to the monthly sentiment survey for July, a 10-point drop compared to the previous set of results for June. This marked a considerable deterioration after two months of optimism about workloads.

RIBA 101620

RIBA鈥檚 66 Portland Place headquarters in Marylebone

Any figure below zero indicates that practices expect workloads to decrease across the next three months.

Nineteen per cent of small practices anticipate an increase in workloads, 25% expect a decrease, and 55% anticipate stability.

But the outlook for medium (11+ staff) and large (50+ staff) practices remained optimistic, rallying by 33 points to +44, the highest figure for two years.  

This meant the mood of the wider profession remained largely steady, with the workload index for practices of all sizes dipping by just 3 points to +1, indicating that architects expect workloads to increase overall.

Optimism has been steadily building in the sector since January, with April seeing the overall index following a prolonged period of gloom which has been the longest unbroken run of pessimism recorded by the survey since it started in 2009.

The regional picture remained mixed, with London (-10) falling in confidence by seven points and the South of England (-2) fell by four points, while Wales and the West (0) held steady.

The outlook for the North of England (+10) fell by five points, and the Midlands and East Anglia (+14) rose by four points, both remaining firmly positive. 

The outlook among monitored work sectors was also a mixed bag. While the commercial sector (+2) fell by three points, it remains positive.

The outlook for the private housing sector (-1) and community sector (-5) held steady; and, while still negative, the outlook for the public sector (-3) improved by two points, the most optimistic it has been since June 2022.  

RIBA head of economic research and analysis Adrian Malleson said: 鈥淭he profession鈥檚 outlook has markedly improved over the last twelve months, but many practices continue to face a challenging environment. While the profession remains positive about future work, there鈥檚 little anticipation of a rapid upswing.  

鈥淛uly鈥檚 Future Trends is the first since the UK elected a new government; but the profession鈥檚 response has been muted in contrast to the large but transitory uptick seen following the previous administration鈥檚 2019 Brexit-focused victory.鈥

He said commentary received in July suggested the market is showing early signs of recovery, but that project delays, which practices blame mostly on the planning system, were holding the recovery back by restricting pipelines of work and putting pressure on cash flow. Practices also reported delays with the 好色先生TV Safety Regulator for higher risk buildings.  

He added: 鈥淲hile some practices continue to note a subdued architect鈥檚 market, others are seeing increased enquiries, post-election. Overall, there is a sense that the market is slowly improving but that it will take time before this translates into significantly increased workloads. 

鈥淲e will continue to report our findings to the government and work with other built environment bodies to monitor these trends.鈥 

The survey鈥檚 staffing index fell by 4 points to +2. The positive figure indicates that more practices intend to increase staff numbers than reduce them.  

Over the next three months, 11% of practices expect to employ more permanent staff, 9% expect to employ fewer, and 81% anticipate no change.