RIBA’s August Future Trends survey shows lingering concerns remain despite optimism

Published by Rhys Taylor-Brown on October 20th 2021, 9:09am

The Royal Institute of British Architects [RIBA] has published the results of its latest Future Trends survey, which provides a monthly report of the business and employment trends which affect the architecture industry.

While optimism remained, it was tempered compared to the previous month and there were signs that several concerns continue to linger over issues such as material shortages, skills shortfalls, planning delays and rising costs.

Over August this year, the overall RIBA Future Trends Workload Index performed strongly, with a +18-balance figure. This is slightly down on the previous month of July 2021, mainly owing to fewer practices expecting workloads to grow in the coming months and more practices expecting them to stay roughly the same. The proportion of practices expecting their workloads to decrease remains unchanged at nine per cent.

All regions reported that they expected their workloads to increase over the next three months [September to the end of November]. Optimism in the capital has somewhat subsided with a balance figure of +12 compared to +17 the previous month, constituting the second successive month of decline despite a sixth consecutive month of confidence.

In the South of England, optimism has dropped off to a +20-balance compared to +33 in July. Meanwhile, expectation of future workloads remains strong in other regions but is subsiding.

The Midlands & East Anglia posted a balance figure of +17, a decrease of 10 points on the previous month, and the North of England +26, also down 10 points. Wales and the West has seen its balance figure fall from +28 to +13 between July and August. Year-on-year, workloads are up seven per cent on August 2020.

Figures around staffing levels also provided cause four encouragement. Although the Permanent Staffing Index subsided by six balance points in August, 11 per cent of practices still expect to employ more permanent staff over September to the end of November, with just four per cent expecting to employ less [a fall of one per cent on July’s figures]. 85 per cent of practices - an increase of eight per cent - say that they forecast their staffing levels will remain the same over the three-month period.

Breaking down the numbers into sectors, the private housing and commercial sectors are expected to provide positive levels of work for architects, while work in the public and community sectors is forecast to contract.

In August, the private housing sector posted a balance figure of +21; six points down on July. The commercial sector dropped a single balance point to stand at +10, while the public sector fell into negative territory with -2. The community sector’s balance figure for August was -4 and it has now sat in the negative figures for 18 months.

RIBA said upon releasing the figures that member companies reported that planning application delays, shortages of key construction materials, the skills gap, and rising costs as disruptive factors in their efforts to deliver on projects.

Adam Malleson, RIBA’s Economic Research and Analysis lead commented: “Overall, the August Future Trends survey continues to show broad-based confidence amongst the profession; however, confidence is softening across the board.

“In part, the outlook is settling following the surge in optimism that followed the lifting of Covid-19 restrictions and the successful vaccination programme. Nevertheless, architects face numerous challenges which together are somewhat dampening expectations about future workload. These challenges include the ongoing effects of the pandemic, the current trading relationship with the EU, and shortages of materials and tradespeople.

“Commentary from practices this month highlights the recurrent issues of construction product shortages and associated prices rises, planning application delays, cost increases [particularly Professional Indemnity Insurance] and pressure on fees.

“There are significant positives, however. Many practices are continuing to report increasing workloads, a full pipeline of projects, and staff being recruited to meet demand. Personal underemployment is low, workloads are up on last year, and growth is expected to continue.

“RIBA is reporting findings to government and working with other bodies in the built environment to monitor ongoing trends. We continue to be on hand, providing support and resources to our members.”

NFA Architects in Kent is one industry operator that has felt the ill effects of rising costs and the effects of the planning system. Nick Farnell, the practice’s design director, feels that now may be the time for a fresh approach to planning to help ease the burden, while incentives for the building trade and a reduction in VAT in his view could provide the solution to issues surrounding rising costs.

Speaking to The Parliamentary Review, Farnell explained: “During the past few years our growth has been quite static with the global pandemic and many political and financial factors affecting our core market. The uncertainty of Brexit influenced the market severely: price drops in property and hesitant investors all impacted us. Covid-19 immediately changed the way we work. However, we are now seeing increased activity from new enquiries, interestingly enough, mostly from European clients and those further afield.

“Despite this much needed push, the cost of building works and VAT is slowing the growth in this sector. Perhaps there could be more incentives to keep the building trade going during this unprecedented time as the knock-on effect is so much wider for employment of local tradesmen and use of all the local service resources. A lowering of VAT on all builds would help enormously and give a boost to those hesitant investors.

“Perhaps a fresh approach to planning would also help. We have seen the introduction of PIP that was expected to assist the building industry for small scale new homes, however planning generally needs an overhaul in our sector. The extraordinary length of time planning and listed building applications take, and the lack of discourse throughout the process, inevitably causes our industry to suffer. Poor planning or listed building approval decisions can create a huge time lag that leads to a strain on funds for all concerned. There is seldom sufficient dialogue between planning officers and the architect, thereby reducing our perceived creditability with our clients.

“Ultimately to ensure dialogue and a proper working relationship with planning, who may need to increase staffing levels, this would require higher fees for applications. I think we could all agree that in London, especially, the cost of a planning application is so low in comparison to the value of the building that an uplift in cost would be acceptable.”

Photo by Evgeniy Surzhan on Unsplash

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Authored By

Rhys Taylor-Brown
Junior Editor
October 20th 2021, 9:09am

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