We were delighted when Ian King from Sky News invited Robert in for a chat on his live show in December. Ian wanted an update on the market conditions for architects and in construction and to understand how our employee-owned practice is navigating the choppy economic conditions we’re in.
Robert was happy to join Ian and while we can’t share a recording of the interview, here is a transcript of their conversation:
Ian King: GDP figures have consistently shown the construction sector is growing more strongly than either services or manufacturing. Despite that, there’s nervousness among architects. The latest industry survey by the Royal Institute of British Architects suggests confidence of that future workload is falling across the country. Well, joining me now is Robert Wilson, he’s director and principal architect at Granit. Robert, welcome to you. Is that survey consistent with what you’re seeing?
Robert Wilson: Yes, certainly there’s a downturn. Some of it could be seasonal. In fact, the last month or so we’ve had a lot of new inquiries, so it’s very difficult to tell.
The big thing with architecture is it’s a long-term plan, so with the construction industry, the stuff that’s happening now probably went into planning after COVID, or some of it even before.
So you know if you’re planning to do a job and you want to work next year, now is the time to start planning it. You know it takes time to design well, and if you want cost certainty, which is obviously in difficult times, you want to be better planned.
Ian King: Certainly, and traditionally the sector outperforms when the economy is doing well and underperforms when it’s doing badly. Would that be your anticipation?
Robert Wilson: This time around, yes? I mean, there’s always a time lag, even during COVID, new inquiries stopped, but we continued delivering projects all the way through that year. When people get out of their houses in at the end of the first lockdown, we were almost overwhelmed with the inquiries, and now we’re building that out. We’ve got projects on site that will take us well into next year and even one that might take us into the year after.
Then you’ve got stuff in planning, and the planners are overwhelmed. So, if there’s a slight downturn, it might even be better for getting planning.
Ian King: How do you reconcile the survey that I just cited with the fact that things in construction right now are pretty OK, as I say, it’s outperforming services and manufacturing.
Robert Wilson: Well, it’s slightly that time lag again. The RIBA benchmark survey, which every year Chartered practises complete and give their information, is based on the previous year, so there’s a slight lag even in the survey information.
It’s very useful to benchmark yourself against other practices and what else is going on. We’re meant to look forward to what we think is going to happen. For example, the change of interest rates. This isn’t a big surprise, as they were never going to stay as low as that. And that will mean that personally, in the private client sector, that will mean a downturn.
We’ve had a massive increase in building costs, which will mean people think harder and need to get more money, more bang for their buck now, obviously.
Ian King: There’s a very tight labour market right now. Are there enough skilled people coming into the profession?
Robert Wilson: Well, the interesting thing is that, of course, it’s a long training, so the people who are coming into the profession started seven years ago. We have the trainees in our firm too; some are due to qualify this summer, but it’s a constant flow and people move on.
We’re an employee-owned practice, so people tend to stay put. And so we grow slightly each year, with new people joining and qualifying.
Ian King: I guess if you were expecting to see softness in the market. I mean, the RIBA survey suggests it’s house building that is going to feel the pinch. Is that your assessment?
Robert Wilson: I think it probably is, but it shouldn’t be. We desperately need housing. There’s a housing shortage, and obviously, the end prices are quite expensive, particularly for the younger generations hoping to get on the ladder.
We’ve got new regulations that are making it more expensive, but again it’s at that time lag. But we were supposed to build 300,000 houses last year. I don’t think we’ve met half that, so the demand gets worse. It’s now 450,000 houses next year, and so if we continue not to deliver the pressure gets higher, and therefore the pressure and the prices match. Just flow and demand right?
Ian King: Robert Wilson, good to talk to you this morning, thank you.
You can find out more about Ian King and his live show here.