Professionals Australia CEO Chris Walton says the architecture industry is undergoing a severe tightening post-GFC and in the wake of the final round of the Building Education Revolution.
“The employment market remains variable and underemployment persists with heavy casualties from the larger architectural services firms and sizeable cutbacks in architect numbers in many of the state public sectors. With the fiscal stimulus now wound down, one of the key questions becomes whether or not construction investment might improve or decline further, and how the status of building and design projects currently on hold or under consideration will be impacted – we're not seeing much movement yet.
“Since the global financial crisis in 2007, it's widely accepted that the architectural and design services industry has been marked by project and design work remaining scarce, pressure on fees, profit margins squeezed in both commercial and residential projects and developers looking to divert risk onto contract professionals to save on project design costs. It remains to be seen whether or not this softening is part of a boom/bust cycle or a new “normal” which will fundamentally change the drivers of the industry.”
CEO of the AIA David Parken recently described the market as flat with a number of practices having to reduce their staffing to match the amount of work they had. He described it as “a trimming of jobs – not a disaster like in 1991-92 where one in two architects lost their jobs.”
Walton said today that in his view this significantly understates the extent of the current problems in the Architecture industry.
“Our industry intelligence suggests that Architect employment is undergoing some fairly severe and ongoing contraction and that the numbers affected are likely to be underrepresented using the normal indicators. Because of the proportion of self-employed Architects, unemployment numbers are likely to be understated, and large scale underemployment with widespread cutback of hours isn't factored in either.
“In fact tightening credit conditions around residential and commercial building activity is likely to continue to constrain industry investment in construction in both the residential and commercial sectors.
“Indications are that in the 90s the profession lost a generation of architects with largescale loss of jobs. The danger is if the industry can't retain young professionals because there's no work or they're only being offered unpaid work or a couple of days a week, the industry is likely to see those individuals leave the industry – and once they're gone, the industry can't respond if and when recovery occurs.
And an even more alarming prospect is if this is the new normal – and that recovery in the form of private investment in residential and commercial construction just doesn't happen. If private investment doesn't kick in and there is no “bouncing back”, then we're looking at significant ongoing unemployment and underemployment – a troubling outlook for the industry in the longer term.