Forecasters hesitate over future growth prospects

Two recent industry surveys – one focussing on workload predictions and the other measuring actual growth – have served to highlight the often inverse discrepancy between expectations and reality.

January saw the CIPS/Markit Construction Purchasing Managers Index (PMI) climb to 48.6, an improvement over the 47 expected by economists, and only marginally short of the threshold that indicates positive growth. The figures indicate that the sector was shrinking at its slowest rate in 23 months.

The most recently published results of the RIBA's Future Trends Survey, meanwhile showed a drop in optimism among architects when predicting future workload and staffing levels.

The CIPS/Markit Purchasing Managers' Index (PMI) indices are derived from continuous monthly surveys of business conditions and track what is actually happening at individual company level. Used by the bank of England and key economists in the UK and abroad, the PMI indices are based on carefully selected panels of executives in companies who report each month on real events. The PMIs cover manufacturing, construction and service sector activity.

The RIBA Future Trends Survey provides a monthly yardstick of workload expectations and employment prospects among architects, based on the responses of a cross section of small, medium and large practices.

Responses to the December Future Trends Survey revealed that fewer practices expected their workload to increase (38 per cent in November to 31 per cent in December), while the number predicting work to stay the same rose from 41 per cent in November, to 52 per cent in December.

Staffing levels were similarly affected, with only 5 per cent of practices expecting staff levels to rise, compared to 10 per cent in November. There was no change in the number of practices predicting a decrease, which remained constant at 11 per cent.

There was sustained improvement among individuals stating that they were underemployed. In October 2009 this figure was 30 per cent, reducing to 28 per cent in November and 23 per cent in December. However, there was also a decline in all forecasted workload predictions across the work sectors monitored by the survey, with the steepest drop in private housing. 36 per cent of practices expected private housing work to increase in November, compared to 28 per cent in December, which has impacted upon the number of practices expecting it to stay constant (59 per cent in December, compared to 51 per cent in November.) Predictions for workload within the commercial and public sectors also dropped; 16 per cent of practices predicted an increase in commercial work in December, compared to 20 per cent in November. Similarly, only 15 per cent of practices predicted an increase in public sector work in December, compared to 19 per cent in November.

"This month's [December] figures demonstrate that there is not yet a sustained trend of increasing optimism about future workloads", says Adrian Dobson, RIBA's Director of Practice. "Larger practices (of 50+ staff) continue to be the most confident about an increase in workloads over the next quarter. Practices based in the North of England, Scotland and Northern Ireland are currently less confident of increases in future workloads compared with those in the rest of the United Kingdom."

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