Inflation worries ease but practices remain nervous about coming year

Confidence levels among UK practices improved last month following a five month decline with an end to the chaos of the Truss government being suggested as one of the reasons why.

Expectations of future workloads in December rose by the fastest rate since July 2020 at the end of the first covid lockdown, according to the latest RIBA Future Trends survey.

The balance of practices anticipating more work in the coming three months increased for the first time since last May and was back at the level seen in August.

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For first time in five months, architects’ confidence stopped declining in December

Around 17% now expect workloads to increase and 25% expect them to decrease, with 58% expecting them to stay the same.

In November, more than a third of practices forecast declining workloads amid worries over the impact of a recession and spiralling inflation.

RIBA head of economic research and analysis Adrian Malleson said the upturn could be explained by greater government stability and resilient sectors such as hotels and high-end residential work.

He also said speculation that inflation may have peaked may be giving practices reason to be cautiously confident.

But he said more architects still expect workloads to decrease than increase, adding: “Practices [are] apprehensive about 2023, citing concerns around recession, fees levels, enquiry numbers, cashflow, and planning delays. Falling spending may harm investment in buildings.

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“To look at the positives, construction products are more available and affordable, and in the recession, high-capital clients are likely to weather the storm, and some sectors will prove resilient.”

All regions remain downbeat except London, which returned an index figure of +4 for workload expectations. Any figure above zero indicates expectations that workloads will increase over the next three months.

The overall index stood at -8 which was up from the -21 recorded in November.