Green shoots? Fewer projects on hold, optimism up and unemployment down
The number of schemes being ditched or mothballed fell for the first time since May, according to new figures released this week
The new statistics coincide with the latest findings from the RIBA’s October Future Trends Survey which revealed that architects are more optimistic about their ‘commercial outlook’ for the first time since February 2010. Meanwhile the number of architects out of work has dropped from 1,275 in September to 1,220.
According to industry tracker Glenigan, 44 projects with a value of more than £100 million, were taken off ‘hold’ during October. The total of stalled schemes across all sectors now stands at 288 - down from 332 in September.
The retail sector looked the most buoyant with the number of schemes ‘on ice’ falling by almost two thirds, dropping by 15 from 24.
Economist James Abraham at Glenigan said: ‘The underlying value of construction projects placed on hold fell significantly over the last three months, compared to the same period of 2009. As the value dropped by 64 per cent, there was a similar 53 per cent fall in the number of projects being postponed.
‘Indeed, every sector saw a decline in the underlying value of projects worth less than £100 million being placed on hiatus: education, retail and private housing all experienced falls of between 70-80 per cent.’
The RIBA’s own survey backs up this increasingly encouraging outlook with the number of practices expecting ‘workload levels to decline’ dropping 6 per cent, from 34 per cent in September to 28 per cent October.
In addition 22 per cent of practices now expected workload to increase, compared to just 20 per cent in the month before.
Employment prospects for salaried architects also grew with 8 per cent of architects expecting an increase in staff in October, compared to 5 per cent in September.
Adrian Dobson, RIBA Director of Practice said: ‘The RIBA Future Trends Staffing Index for October 2010 is -8, up significantly from -14 in September. We have seen that smaller practices (balance figure -3) remain much more upbeat about future growth in staffing numbers than medium (balance figure -20) and large practices (balance figure -56).
‘London (balance figure +2) and the South of England (balance figure +12) are beginning to exhibit increased confidence levels, supported by an increase in activity in the London commercial sector, and sustained workload levels in the high-end residential markets in both London and the home counties. A number of practices have also reported optimistic signs in the leisure and retail market, and our view is that a sustained increase in activity in the key commercial sectors will be the first indicator of recovery with real momentum.
‘It is important to recognise that, whilst in terms of actual workload we have seen something in the order of a one third reduction since the peak of the boom, there remains a significant amount of on-going construction activity. Residential projects, particularly for individuals with access to private capital, who are not heavily dependent on borrowing, remains buoyant, and London in particular is seeing high levels of commissions for overseas residential property buyers. Concerns however remain about the potential impact of the planned VAT increase on domestic schemes.’