The architecture industry is experiencing a stark divide between large and small firms, according to the latest Royal Institute of British Architects (RIBA) Future Trends survey. While bigger design companies are showing renewed confidence thanks to increasing commercial projects, smaller practices employing up to ten people are struggling with declining confidence as private housing work drops and clients become increasingly cautious.
This significant shift has created what industry experts describe as a two-speed sector, which has affected the overall forecast for all architectural practices. RIBA's September Future Workload Index fell into negative territory at -2, marking the first time it dropped below zero since January and continuing a downward trend that began in midsummer.
Large architectural firms are demonstrating remarkable resilience and optimism in the current market. Their combined Workload Index surged to 39, representing the strongest reading recorded in twelve months. Nearly half of these major firms, specifically 46 percent, expect their workloads to grow over the next three months. Only 7 percent predict a decline, while the remaining firms anticipate no significant changes in their business volume.
The situation for small practices tells a dramatically different story. Their Workload Index dropped to -8 in September, falling from -5 in August, indicating worsening business conditions. Among smaller firms, just 18 percent expect an increase in work, while one in four firms anticipate a decline in their business over the coming months.
Regional differences further highlight the uneven nature of the current market recovery. London maintains a positive outlook with an index of 9, while the North of England shows even stronger confidence at 13. However, the rest of the country has turned pessimistic about future prospects. The Midlands and East Anglia experienced the steepest decline, tumbling to -16, while Wales and the West slipped to -2, and the South of England slid to -9.
The overall market conditions reveal a concerning trend when compared to the previous year. Current workloads are now 9 points lower than they were at this time last year, underscoring a challenging market environment. This data highlights a construction industry where large commercial practices are managing to hold steady and even thrive, while small domestic specialists are bracing for what appears to be another difficult winter ahead.
