In January when we undertook our 2020 PACE survey, we couldn’t have foreseen how events would unfold just a couple of months later. Not to ignore what was happening last year, we ran a shorter survey in mid-May to get a better sentiment of what is happening in the industry now and what we can expect as we navigate the post COVID-19 future.
It would be remiss of us to not reflect on the past year as reported in the PACE Survey 2020, and although we may have to readjust some of our forecasts and expectations, let’s look at the positives from the architecture and design industry over the past year.
Summary of 2019
By and large, 2019 was a consolidation of the last five years. The industry was still in growth mode, but not at quite the same rapid rate of some previous years and like the rest of the built and natural environment, business and consumer confidence levels proved to be (and were also forecast to be) a significant influence on business activity during the year.
The firms that responded to the PACE Survey in January were mostly optimistic about market conditions in 2020, with 52% expecting to see business activity increase, while only 5% expect to see conditions retract.
As the market stabilised, firms found it increasingly more difficult to retain staff, particularly as voluntary staff resignations were the highest they have been over the last seven years. This indicates a buoyant job market with employees confident that they could leave their current role and secure a new position with relative ease. As would be expected due to a higher staff turnover and an overall busy market, redundancies and/or forced reduction in hours, were also at their lowest for the last five years.
Interestingly, only 19% of contributing firms regularly found it difficult to recruit technical professionals without outside assistance with a further 53% occasionally finding it difficult. This, combined with a healthy market and a solid demand (but not an over demand) for talent also meant that average salaries grew at a similar rate of the past five years.
Where are we going in 2020?
In this years’ PACE Survey we asked if firms were planning for changing market conditions to keep up with changing business needs. Only 27% said that they had a plan in place. Having a plan going forward is probably now more critical than ever – especially in light of the effects of COVID-19.
Aspect’s COVID-19 survey asked organisations about the impact the pandemic has had on their business. Only 7% acknowledged significant impact to date, with 93% reported minimal changes. At time of writing, COVID-19 has not completely decimated the market as there are still legacy projects being completed. However, as we move deeper into 2020, forward planning will be key for most organisations to continue to have a flow of new projects into the pipeline. Business owners and directors must recognise that they must have contingency plans in place – A, B, C and right through to Z. Plans must be devised and ‘plan for the worst, but hope for the best’.
Unsurprisingly market sentiment has shifted dramatically since January. Only 5% of firms in the first survey, expected business activity to drop in 2020, but the more recent survey that figure has sky-rocketed up to 73%.
What our COVID-19 survey also revealed is how critical the next three months are going to be. Most organisations agreed that restoration of staff hours should start to increase over the next 0-6 months, but with a slight delay out to 3-6 months before we see salary levels begin to return to normal. However, it clear it’s going to be a slow return, with work volume, staff numbers and revenue unlikely to return to pre-COVID-19 level for another 12 months.
This will be dependent on a couple of other factors – the duration and continued viability of JobKeeper and the influx of new projects. At this point I’ll reiterate the importance of planning, to ensure survival in the future and in particular being aware of how you can utilise the Government’s stimulus packages to your best advantage.
Already the government is proposing cash injections for the wider built and natural environment in a hope to stimulate the economy and jobs. Projects are being pushed through the planning phase and planning requirements have been eased. The residential housing market is also looking to pick up with grants announced for home renovations and new builds under the new HomeBuilder Scheme.
Is the market different than what we expected 6 months ago – undoubtably. However, whispers to stimulate growth in our industry are slowly coming to fruition and pending any secondary outbreaks or a tightening of restrictions, we are hopeful of a slow return to normality within the next 12 months.
Lastly, and absolutely not least, we have already raised over $11K for our chosen charity (Syndromes Without A Name) for this year. This takes our total donations from PACE over the years beyond $100K. This is something that I am very proud of and all those who have contributed to PACE should be too!