RIBA Report Shows Architects Practice Revenue Down by 15%

RIBA report - Architects in building

A KEY FINDING of the Royal Institute of British Architects (RIBA) annual summary of business trends in architecture and construction is that practice revenue was down by 15% compared to the 2020 report, but profitability was maintained.

The RIBA’s annual Business Benchmarking report tracks the turnover and salaries of RIBA Chartered Practices, indicating how architecture practices compare to others on a broad spectrum of criteria.

This year’s report assesses the period 1 May 2020 – 1 May 2021, reflecting how RIBA architect’s practices responded to pandemic challenges.

Architect’s Revenue Reductions

In addition to the headline reduction in practice revenue, there were reductions of over 30% in revenue from work on offices, culture and entertainment, and sports and leisure. There was also a downturn of 14% in revenue from international work that was felt particularly hard by practices with 100+ staff.

Despite revenues dropping, results show that practices preserved profitability. This has been achieved through a combination of a reduction in expenditure and adapting to the market.

Domestic Work

Staff numbers have fallen by 11% and Chartered Practices have pivoted to where the work is: one-off houses, domestic extensions and alterations. Revenue from those work sectors increased by 3%, which is impressive compared with the 15% fall in revenue from all other sources. RIBA Chartered Practices reported they were working on just as many jobs as before the pandemic and bid for more work than the previous year, while maintaining the same competitive success rate.

RIBA Report

Other key trends revealed in the 2021 RIBA Business Benchmarking report include:

  • Though staff numbers have fallen by 11% compared to 2020, most salaries are unchanged
  • The architects’ profession is contributing £3.0bn to the UK economy, 15% lower than the £3.6bn seen in the 2020 report
  • Income from international work has fallen by 14% to £535bn, down from £624bn in last year’s survey
  • An increase in one-off housing work and extensions: 27% of all revenue comes from private housing, increasing to 50% if a practice employers fewer than ten members of staff
  • Chartered Practices are working on just as many jobs as in 2020 (although these may be smaller jobs).

Guarded Optimism

Adrian Malleson, Head of Economic Research and Analysis at RIBA, said: “This year’s Benchmarking report is the first comprehensive assessment of the effects of the pandemic on RIBA Chartered Practices. With revenue and staffing being down, at first sight, this year’s report is punishing reading.

“Yet practices have once again proven their ability to adapt to market changes. The pandemic has accelerated that adaptation; change to business’ strategy was needed in weeks or days, rather than months or years. Practices rapidly and successfully responded to new client requirements, new markets, and a need for new ways of working. Through the worse economic and societal shock in memory, practices have preserved their profitability.

“As we look forward, the RIBA Future Trends survey suggests there is reason for guarded optimism. Although the twin pressures of Covid and Brexit continue to weigh down upon the supply side of construction, the demand side is holding up. A recovery in architects’ work has been led by private housing and is now broadening; as 2021 draws to a close, the commercial sector is also picking up. We hope the worst of the Covid storm is over, and practices can look forward to greater stability in 2022.

“Architects are well equipped to add real value mid and post-pandemic, as we reimagine the built environment and the future of the workplace and homes.”

Read the Executive Summary of the 2021 RIBA Business Benchmarking report

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