RIBA Future Trends Survey: The Impact of Brexit Uncertainty on Construction in 2019

and December 2019 report

The Royal Institute of British Architects (RIBA) has today published its monthly summary of business intelligence, alongside a commentary on the stand-out trends reported by architects throughout 2019.

In 2019, Brexit uncertainty had a significant impact on the architecture profession and the wider construction industry.   Monthly workload predictions were …..

…… extremely volatile.   In the second half of the year, as the prospect of a no-deal Brexit grew closer, the Index fell; from a 2019 high of +9 in June, to a negative figure for three of the final four months of the year.   In October when crashing out of the EU looked like a real possibility, the Index stood at -10, the lowest balance score since 2011.

Architects consistently described heightened client caution: with a reduction in project enquiries; projects being put on hold or failing to move past early design stages; and downward pressure on fees.

The differing levels of optimism between practices in the north and south of the UK was another consistent trend.   Architecture practices in London and the South of England were far less positive about their future workloads, a sentiment shared by smaller practices, wherever they were located.  Larger practices, and those in the North of England, felt consistently more positive about securing long-term work.

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RIBA Future Trends – December 2019 report
In December 2019, the RIBA Future Trends Workload Index sat at -2 – slipping back into negative territory for the final month of the year.

Small practices (1-10 staff) were most negative about future workloads – returning a balance figure of -6 – while medium (11-50 staff) and large-sized practices (51+ staff) remained positive, returning a combined balance figure of +38.

London fell into negative territory (dropping from zero to –18) along with the Midlands & East Anglia who fell from -6 to -13.   The South of England held steady at zero whereas practices in Wales and the West and the North of England remained level and positive, returning balance figures of +14.

The private housing sector saw the biggest rise to +2 following three months in negative territory (the longest run since 2009) and the community sector rose slightly to -3.   The commercial and public sectors both remained negative, falling back one point each to -5 and -4.

The RIBA Future Trends Staffing Index remained steady, with a balance figure of +2 in December and the anticipated demand for temporary staff in the next three months increased to +2. 22 per cent of practices said they were personally under-employed in the last month, due to a lack of work.

RIBA Head of Economic Research and Analysis, Adrian Malleson, said, “2019 Future Trends data consistently emphasised the impact of Brexit and political uncertainty on the construction industry.   Reports of postponed projects, downward pressure on professional fees and skills shortages were prevalent, alongside a reluctance from clients to invest in building projects.

“Larger practices and those in the North of England tended to be more optimistic, suggesting a shift in the focus of activity away from London and the South in 2019.   It was also a year which saw an increase in larger firms looking beyond the UK for work.

“After an extended period of volatility, and with a new government in place and more clarity on plans to leave the EU, there are glimmers of growing confidence in the profession, with some practices starting to report an increase in enquiries.   Our Chartered Practices are resilient and adaptable to challenge.   We look forward to presenting their predictions over the coming months.”

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