25th August 2023

The Royal Institute of British Architects (RIBA) has published the latest Future Trends survey results, a monthly report of the business and employment trends affecting the architects’ profession.

And, in a blog, RIBA Head of Economic Research and Analysis Adrian Malleson explores the wider economic context surrounding this month’s trends and highlights how practices might navigate the challenging business environment.

In July, architects became more downbeat about workloads, but slightly more confident about staffing levels.

The RIBA Future Trends Workload Index (how practices expect workload to change over the next three months) dropped to -10. Overall, architects expect their workloads to fall, with the lowest level of confidence since the aftermath of the Truss min-budget.

The RIBA Future Trends Permanent Staffing Index (how practices expect permanent staffing to change over the next three months) has recovered by 1 point in June to 0 in July, suggesting practices are looking to retain, if not recruit, staff.

Small practices remain markedly less hopeful than their larger counterparts. None of the monitored work sectors or regions expect increasing workloads, with London feeling the least pessimistic. Current workloads remain lower than a year ago.

Workloads expected to fall further

The RIBA Future Trends Workload Index fell by 11 points to -10.

Over the next three months, 16% of practices expect workloads to increase, 26% expect them to decrease, and 58% expect them to stay the same.

Medium (11+ staff) and large (50+ staff) practices remain optimistic about future workloads, with a combined Workload Index figure of +20, a dip of 3 points compare to last month. The outlook of small practices (1-10 staff) dropped by 12 points to -15.

Overall, the regional picture has deteriorated. No regions have a positive outlook, and confidence has faltered among those who had been optimistic. The North of England’s (-3) outlook fell by 22 points, and Wales & the West (-12) fell 18 points. The South of England (-28) saw the largest decrease in confidence, by 24 points. The Midlands & East Anglia (-8) rose by 5 points, and London (0) is the least pessimistic.

All four monitored work sectors have a negative and deteriorated outlook on future work. As rising interest rates continue to curtail housing activity, the Private Housing (-13) sector fell by 5 points. The Commercial (-7) sector fell 10 points. The outlook for the Public (-15) sector fell 9 points, in its fifteenth consecutive negative month. The Community (-13) sector fell by 4 points.

The Sectors section of our Directory includes our Marketing to Architects feature which looks at targeting the sector,
key media channels and events, and has access to our downloadable database of 1,200+ UK practices

Modest recovery in confidence in staffing levels

The RIBA Future Trends Permanent Staffing Index has recovered by 1 point to 0. This indicates practices’ commitment to retaining staff, even as they anticipate falling workloads.

Over the next three months, 11% of practices expect to employ fewer permanent staff, 11% expect to employ more, and 78% expect no change.
Medium and large practices (+14 combined Staffing Index) continue to expect an increase in permanent staff.
Small practices (-3) expect staffing levels to decline.
The employment outlook in London (+2) has turned positive following a brief fall into negative territory last month. Wales & The West (+11) saw an uptick of 7 points despite its fall in confidence about workloads. In contrast, the North of England (-6) deteriorated by 20 points. Falling staffing numbers are also expected in the South of England (-8), which fell by 6 points, and the Midlands & East Anglia (-3), which, though still negative, rose by 10 points.
The Temporary Staffing Index (-3) fell by 1 point, suggesting a reduction in temporary staff in the next three months.
Levels of personal underemployment rose to 22%, an increase of 4%.

RIBA Head of Economic Research and Analysis Adrian Malleson said, “The profession has become downbeat about future workloads, and the return to confidence that followed the reversal of the Truss minibudget has been short-lived.

“This pessimism is concentrated among smaller practices, as interest rates rises make project financing increasingly difficult to obtain. Small-scale residential work has been adversely affected by mortgages becoming more expensive and difficult to arrange.

“Medium and large practices remain optimistic about future work.

“This month’s feedback suggests the market is deteriorating. Practices continue to highlight pre-existing issues: of the ongoing effects of Brexit, project cost inflation, planning delays, fee competition, and Professional Indemnity Insurance (PII) costs.

“A number of practices report reduced enquiries and concerns about future workloads.

“Some also report falling commissions from the leisure and entertainment sector and the public sector. There are payment delays as clients seek to manage cash flow more tightly.

“However, other practices continue to report steady workloads and brisk levels of enquiries, even within the domestic sector. Not all potential clients are affected by tightening monetary policy.

“We will continue to report our findings to the Government and work with other built environment bodies to monitor trends.”

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