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2018 predictions: Is business going to get worse before it gets better?

2018 themes workloads
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Richard Waite asked leading figures about their hopes and expectations for 2018

‘The psychological impact of Brexit and tuition fees is perhaps making architecture a less attractive profession and the UK a less appealing place to practice’

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Ben Derbyshire, RIBA president

Predictions for workloads and fees are always a hostage to fortune – especially in the current climate of uncertainty for the UK economy. Although recovery from the recession of 2008-2011 has been long and slow for architects, workloads and fee levels have been rising for several years. With the world economy still on an upswing, 2018 could have seen another year of steady if unspectacular improvement. However, while our monthly RIBA Future Trends survey shows overall workloads remaining stable for now, there are early warning signs that 2018 may be a bumpy ride. 

Practices in the rest of the UK remain fairly upbeat, but those in London, which are perhaps less focused on the domestic economy and whose fortunes are more aligned with globalised industries, have been consistently gloomier about future work prospects. Public sector work is flatlining, and the recent Budget didn’t suggest any dramatic change soon. 

The commercial sector has been slowing for some time, and there is increasing anecdotal evidence that Brexit uncertainty is causing many commercial clients to pause projects once planning permission has been secured. We remain very dependent on the private housing sector to maintain momentum. 

Practices say they are having to expend greater resources on chasing outstanding fees and it seems unlikely that fee competition will remain anything less than intense.

Any slowdown in 2018 may not necessarily have an immediate impact on prospects for salaried architects. But the psychological impact of Brexit and tuition fees is perhaps making architecture a less attractive profession and the UK a less appealing place to practice. So we may yet face a skills shortage even if the overall market for architectural services becomes more subdued. 

‘Brexit is profoundly dispiriting. We are losing skilled workers and highly trained professionals weekly’

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Gerry O’Brien, AKTII

All the signs are that the next couple of years are going to be pretty tough. Much of the chatter among architects is about diminishing order books, and we have already seen the occasional nonsensical fee bid appear from consultants as fear of falling workload begins to produce flawed business strategies. 

Remarkably, as uncertainty surrounding Brexit begins to foment in these practices, there remain many examples of projects presently in delivery that are struggling with the legacy of work that needs to be done without the adequate fee or resource to have any possibility of achieving it. Nose, face – goodbye! But not really a surprise, as long-term strategic thinking is difficult in a knowledge vacuum.

Brexit, from the perspective of our industry, is profoundly dispiriting. We are losing skilled workers and highly trained professionals weekly. Many say they feel a cultural shift within the UK. 

These departures, coupled with the falling pound, are going to apply inflationary pressure to the capital side of any development appraisal. But it is not clear that the initial fillip given on the other side of the balance by the weak pound will continue to attract inward investment.  

‘Transport infrastructure and hospitality have been buoyant in 2017 and look set to remain strong’

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Lindsay Urquhart, Bespoke

The majority of the practices we work with appear to be pretty busy. Indeed many seem surprised by how much is on their books, given the uncertain political and economic landscape. But along with this comes a definite air of caution. Practice leaders of both small and large studios are worrying about how long the work will last. Unless there is a dramatic breakthrough with Brexit, this situation will continue into next year. 

Fees remain a hot topic. The pressure on architects’ margins has not abated. They never really recovered post-2009; then came the referendum vote and, with it, pressure to reduce them further. Lots of the firms we work with are getting increasingly frustrated by other practices which are bidding for work at ridiculously low rates. This seems to happen every time there is a squeeze and I see no reason for this to change as we move into the new year. 

In terms of sectors, transport infrastructure and hospitality have been buoyant in 2017 and look set to remain strong. Hospitality has been bolstered by the weak pound, which has kept the UK attractive for tourists. Hotel occupancy in London is now close to 100 per cent at weekends, and this seems unlikely to change in the next six months. While the bubble may burst in the next couple of years, it’ll remain strong in the short term. 

Practices specialising in transport have been incredibly busy this year. They have the advantage that their expertise and skills are required here and overseas. Practices such as WilkinsonEyre, Weston Williamson and Grimshaw, which have a recognised specialism in this sector, look set to do well again in 2018. 

‘The last 10 years have seen a surfeit of high-spec projects. The next 10 could see a return to basics’

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Teresa Borsuk, senior partner, Pollard Thomas Edwards

There’s evidently a steady belt-tightening taking place. There’s more bureaucracy to deal with. Expectations of the architect’s role and responsibilities are greater. Margins are tighter. Time, money and skills are under pressure. The only certainty seems to be the uncertainty.

It’s tough just now and I guess that 2018 will be even tougher. The last 10 years or so have seen a surfeit of relatively high-spec projects. The next 10 could see a return to basics. The challenge will be to continue to make valued buildings and places with limited resources and increasing demands.

But we’ve been here before. Architects have always had to respond to the market roller coaster – it’s endemic to the profession. Luckily, architecture encourages broad thinking and optimism even in the harshest of times. My diary entry for 9am, 2 January 2018 starts with a business review of new opportunities!

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