The latest data comes as the RIBA released findings from its Future Trends survey from October showing that practices expected workloads across all sectors to fall and that they reported ‘high levels of pessimism’ in the housing sector.
According to Glenigan’s UK Construction Industry Forecast 2023-2025, the total number of detailed planning consents fell by 10 per cent during the first nine months of the year.
It said ‘restrained’ private sector investment, a housing market slowdown, weak UK economic growth, and high interest rates would suppress sector activity for the remainder of the year.
As a result, the construction industry intelligence expert predicted a continued decline in all work during the rest of 2023 and that residential project starts would fall 23 per cent.
But Glenigan said that the ‘prospect of a recovering economy and market certainty’ could lead to renewed construction growth, forecasting ‘a partial recovery’ with a four per cent increase in residential work in 2024 (seven per cent across all sectors) and 11 per cent in 2025.
Glenigan’s economic director Allan Wilen said: ‘After sharp falls in starts and a challenging set of economic circumstances in 2023, construction can expect gradual improvement in market conditions over the next two years.
‘Interest rates now appear to be at their peak, and a gradual easing in rates from 2024 should help to rebuild private investors’ and homebuyers’ confidence and lift private sector activity.’
Wilen predicted the biggest areas for workload growth would be in warehousing and logistics, office refurbishment and fit-out, and the ‘repurposing of redundant’ commercial premises.
Meanwhile, the RIBA’s monthly bellwether survey of the profession’s morale found architects felt less upbeat about future workloads and staffing levels in October, following a surprise bounce back in September.
The institute also uncovered that the ‘optimism gap’ between small and larger practices had also shrunk as ‘confidence wavers’ among larger practices, while staffing levels were expected to drop.
More than a quarter of those polled (28 per cent) expected their workloads to decrease.
RIBA head of economic research and analysis Adrian Malleson said: ‘After last month’s partial recovery, this month’s survey results reflect a more downbeat profession.
‘While we can assume that the sharp downturn in potential private housing sector work is impacting smaller practices, larger practices are also moderating their workload expectations.’
Malleson added: ‘Across the board, workloads continue to feel the squeeze of planning delays, a weak UK economy, client payment delays, financing uncertainty, and increased interest rates.
‘Several practices report more new enquiries after a quiet spring and summer’
‘Practices also report project delays caused by clients and the industry adapting to regulatory changes, such as the requirement for a second staircase for buildings over 18m, and the implementation of the Building Safety Act.
‘Nevertheless, some practices continue to report demand for their services outstripping their capacity, with full pipelines of work and healthy levels of new enquiries. Several practices report more new enquiries after a quiet spring and summer.’