Confidence slumps to lowest level for a year as practices weigh impact of autumn Budget
Workload expectations fall in all regions as hopes of recovery fade, RIBA survey findsLast months RIBA Future Trends survey found confidence in the architecture sector plummeted to the lowest level in a yearOptimism in the architecture profession has taken a sharp downturn with practices now expecting workloads to slump over the next few months, according to RIBA.The institutes latest Future Trends survey found the index for future workload expectations plummeted by 11 points last month to -9, the lowest since December 2023 and the steepest fall for more than 18 months.Any index figure below zero indicates practices which responded to the survey, when taken as a whole, expect their workloads to fall over the following three months.The survey found just 17% of practices expect more work to come in over the winter, with 26% expecting workloads to dwindle.The findings come after eight months of relatively stable optimism levels in the sector with the index hovering just above zero since March.But RIBA said the outlook had deteriorated across the country in November, with all but one region reporting falling confidence and none reporting overall optimism about future work.Wales and the West, the least optimistic region, has seen its workload index plunge by 32 points, while the North of England, previously the most positive region, has fallen by 24 points to zero.Workload confidence in all four monitored work sectors has also fallen back, with private housing slumping six points to -11, the commercial sector falling four points to -2, the public sector slipping four points to -8 and the community sector worsening by four points to -8.> Also read:Is an oversupply of architects driving down fees?> Also read:Labour must deliver on its promised planning reforms to drive economic growthThe survey comes in the wake of the governments tax-raising autumn Budget, which resulted in the Office for Budget Responsibility downgrading its growth forecast for most of the rest of this Parliament.RIBA head of economic research and analysis Adrian Malleson said the growing optimism of the second half of the year has now dissipated.The recent budget has not brought market confidence. Commentary received from practices in November describes a tough market. Planning delays continue to hinder project progress, fee competition remains intense, and some clients are paying late for services. These combined challenges weigh down on practice profitability.Some practices report concerns that, following the budget, inflation and interest rates will be higher than was expected. Nevertheless, some practices strike a more positive note, describing an increase in enquiries and expectation of new work secured for 2025, as interest rates further fall.Current workloads for practices are now an average of 11% lower than they were 12 months ago, although RIBA said the pessimism is mostly contained within smaller practices, with practices employing more than 11 staff remaining largely positive.