Following a dramatic post-referendum dip, August’s future trends workload index suggests spirits are up again, writes Adrian Dobson
The RIBA future trends workload index recovered ground this month, rising to +8 in August 2016, from -7 in July. Last month our key workload confidence index experienced a dramatic post-referendum decline in sentiment, and the bounce-back this month seems to reflect other economic indicators and surveys, which have also broadly painted a brighter picture than in the immediate aftermath of the historic decision to leave the EU. Nevertheless, although our workload forecast is back in positive territory it remains significantly lower than in the first half of the year. We anticipate that the index will remain volatile for some time as the profession gets to grips with the full implications of the UK’s new relationship with the EU.
In terms of geographical analysis, optimism about future workloads is strongest in the Midlands and East Anglia (balance figure +24), and the north of England (balance figure +21). London (balance figure -6) remains relatively gloomy about future prospects, perhaps reflecting greater exposure to Brexit-related issues.
Analysing this month’s data in terms of practice size, it is large practices (51+ staff), with a balance figure of -17 that remain most anxious about their future pipeline of work. Small practices (1-10 staff), with a balance figure of +9, and medium-sized practices (11-50 staff), with a balance figure of +12, remain positive about future work prospects.
In terms of different work sectors, the public sector workload forecast nudged up marginally this month, rising to -3 in August from -5 in July. The community sector forecast was also on an upward trajectory, standing at zero this month compared with -4 last month. However, there is clearly no widespread anticipation of any dramatic increase in work in the public and not-for-profit sectors in the next quarter.
Concern about commercial work such as office and retail seems to be the principal driver of post-referendum jitters
The private housing sector workload forecast remains the most buoyant of our sector forecasts, returning a balance figure of +7 in August. Our commercial sector workload forecast moved up from its low last month, recovering to -6, but it is a concern about commercial work in areas such as office and retail that seems to be the principal driver of post-referendum jitters.
The RIBA Future Trends Staffing Index also moved upwards this month, standing at +7 in August, rising from +4 in July. Despite obvious anxieties over the broader political and economic environment, 94 per cent of our practices expect to have the same number or more staff in three months’ time.
Small practices returned a Staffing Index balance figure of +6 this month. Medium-sized practices, with a balance figure of +24, also remained positive about future staffing levels. Reflecting the sentiment in the workload index, large practices were the most cautious about future staff numbers, with a balance of zero.
Commentary received from our participating practices continues to be dominated by the uncertainty generated by the referendum outcome. Again this month, a small number of practices have reported projects cancelled or postponed as a direct or indirect result of the leave vote, but for most correspondents it is concern about the impact of political and economic uncertainty in the medium term that is affecting sentiment.
Adrian Dobson is executive director members at the RIBA and author of 21 Things You Won’t Learn in Architecture School