While the latest RIBA Future Trends figures show overall confidence unchanged, bigger firms are disproportionately pessimistic and fear they may have to shed staff, writes Adrian Dobson
The RIBA Future Trends Workload Index was unchanged this month, remaining at +8 in September 2016. Our key workload confidence index has stabilised following the dramatic fall it experienced in July and is back in positive territory, albeit standing substantially lower than its pre-referendum level.
Optimism about future workloads continues to be strongest in the Midlands and East Anglia (balance figure +17) and the North of England (balance figure +13).
In terms of practice size, large practices (51+ staff), with a balance figure of -14, seem to have suffered the biggest reduction in confidence levels following the Brexit result. Small practices (1-10 staff), with a balance figure of +8, and medium-sized practices (11-50 staff), with a balance figure of +14, remain positive about future work prospects.
It seems clear that the commercial sector has borne the brunt of post-referendum caution
In terms of different work sectors, the public sector workload forecast picked up two points this month, standing at -1 in September rising from -3 in August, but the outlook for public sector work seems to remain steady rather than dynamic, with little prospect of any rapid growth in overall public sector capital spending levels. Infrastructure and higher education appear to continue to offer the brightest opportunities in the public sector.
The community sector forecast fell back a little, standing at -1 this month compared with zero last month.
The private housing sector workload forecast remains by far the most buoyant of our sector forecasts, recovering very strongly this month, and rising to +16 in September up from +7 in August.
Our commercial sector workload forecast edged back into positive territory, building on its recovery last month to stand at +1 in September. It does now seem clear though that it is the commercial sector that has borne the brunt of post-referendum caution.
The RIBA Future Trends Staffing Index fell back somewhat this month, down to zero in September from +7 in August. Practices are clearly feeling more cautious about taking on additional staff. However, it is important to note that 93 per cent of practices expect to have the same number or more staff than at present in three months’ time, with only 7 per cent anticipating a smaller workforce.
The bespoke housing market in particular seems to continue to be buoyant
Small practices returned a Staffing Index balance figure of +1 this month. Medium-sized practices, with a balance figure of +4, were the most positive about future staffing levels. Large practices were the most cautious, with a balance of -14, indicating that we may see further staffing reductions at some large practices in the coming months.
Commentary received from our participating practices this month was fairly mixed. A small number of practices report that the uncertainty generated by the referendum outcome has manifested itself in a slow-down in project progress and some project cancellations. This seems to mainly be concentrated in the commercial sector. At the same time a significant number of other respondents have painted a much more benign picture of a market for architectural services that is more cautious than in recent years but remains resilient. The bespoke housing market in particular seems to continue to be buoyant despite wider macro-economic concerns.
Adrian Dobson is executive director members at the RIBA and the author of 21 Things You Won’t Learn in Architecture School. A full copy of the RIBA Future Trends Survey monthly report is available online.