One in five architecture firms making a loss, says report

One in five companies in the UK architecture industry is making a loss, according to new research.

As many as 282 companies in the sector turned a loss during the most recent financial year, according to data from research company Plimsoll.

In recent weeks, it emerged that Foster + Partners made a pre-tax loss of £16m in the last financial year. Other companies to sink into the red in recent times include Archial, Aukett Fitzroy Robinson and Building Design Partnership.

When it emerged in November 2007 that BDP was operating at a loss, chief executive Peter Drummond said that architects who operate as private companies do not need to focus on the bottom line. He said: “We do not have the need to bolster our profits or pay external owners.”

Plimsoll said there was a “band of serial loss makers” operting in the sector, with 87 companies making a loss for the second or third time.

He said: “These companies are either blatantly undercutting the rest of the market to enhance or maintain market share or, more likely, have delayed making the painful decision more prudent companies have made recently. No one wants to trim costs, lay off staff, cancel dividend payments and the like but continuing on regardless is fast becoming unviable.”