ACA Pulse Check 4 - Preliminary Findings21 October 2020
What has changed over the last four months? What has stayed the same? The final Pulse Check survey for the year is an opportunity to see how practices were tracking against themes developed in earlier surveys and to find out about the impact of the Federal Budget and the changes to JobKeeper.
Many of the patterns are similar to Pulse Check no. 3 – there is ongoing concern about workflow, along with signs of projects restarting. JobKeeper has kept many practices afloat and saved many jobs, but new initiatives announced in the Federal Budget mean little to our respondents. Wellbeing is fairly postive overall, although there are concerns about the toll on senior managers in particular. The cost of delays and cancellations reported by respondents have increased to $10 billion.
The survey was answered by 511 practices, employing more than 5,600 full-time equivalent (FTE) ‘technical’ staff, and 690 FTE casual technical staff. Just over half (52%) the respondents represent very small businesses, employing five people or fewer. The survey also has good representation from larger practices, with 16 responding practices employing more than 100 people (and five of these employing more than 150 people). Architectural practices from NSW and Victoria comprise 65% of the respondents – a similar pattern to Pulse Check no. 3.
Project cancellations and delays
The total construction costs of the delayed and cancelled projects are significant – a total of $10 billion across the responding practices comprised of $4 billion of cancelled work and $6 billion of delayed work.
The good news is that 43% of respondents have had projects restart, while the long-form answers reveal that some practices are very busy.
Activity has dropped off somewhat across all sectors, with the biggest drops in multi-residential and commercial. Private residential and affordable and/or social housing have remained relatively stable.
The survey reveals a very broad range of experiences in relation to the pipeline of work. Of responding practices, 20% face immediate work shortages, while another 19% have more than six months of work. In between these two extremes, the largest group has three months of work lined up (25%).
More than two thirds of responding practices had experienced a decline in revenue. The most common drop was 30%, experienced by about a third of respondents to this question. Worryingly, another 38% were coping with a reduction of 40% or more, and some were managing with a 60% decline.
The economic impact is being felt in Melbourne in particular, with 80% of practices based in that city experiencing a loss of revenue of some kind.
The JobKeeper Payment scheme has had a strong positive impact on practices’ ability to retain staff and prevent stand downs – with the number of positive replies slightly higher than in Pulse Check no. 3. Recent reductions in JobKeeper are a concern, with 22% of respondents expecting the changes to have a negative impact on their ability to keep staff on and 42% uncertain about the impact at this stage.
The Federal Budget initiatives are not expected to have a significant positive impact. Some practices anticipate taking advantage of the instant asset write-off, but few see this as having a major impact. The JobMaker program has little relevance and will not offset the impact of reduced JobKeeper.
The outlook on wellbeing is fairly positive overall, with senior management being the cause of most concern, particularly in the smaller practices. Almost a third of respondents think that mental wellbeing is better than at the start of the pandemic, another rough third see it as similar, while the remaining third consider it worse. Melbourne respondents reveal additional stress, with nearly half the respondents in that city rating the wellbeing of the practice as worse (41%) or much worse (9%) now as compared to the start of the pandemic.
Access the preliminary results via the links below:
The ACA would like to thank the Australian Institute of Architects and ArchiTeam for supporting this survey with their members.