How architects fared in the last recession

On 3 June 2020, federal treasurer Josh Frydenberg confirmed Australia had entered a recession, on the back of ABS data that showed a 0.3 percent decline in economic output in the March quarter. This marks the beginning of the first recession in almost 30 years, something which a generation of architects would not have experienced. The economic bite from the sudden onset of the coronavirus pandemic has already started to take a toll on architects.

With a recession upon us, we dug through the Architecture Australia archives to find out how architects fared in the last recession in the early 1990s. These reports from May 1991 and November 1992 show a state by state breakdown or architects’ employment levels at the height of the recession and as architectural work began to return.

Profession in crisis

(Originially published in Architecture Australia, May 1991.)

The savage recession continues in the building industry and, to date, has put more than 30 percent of the 20,000 people employed in architectural practices out of work.

At this stage, Victoria and New South Wales have experienced the heaviest casualties with retrenchment figures peaking at 45 percent, while employment of architects in the ACT are predicted to increase this year.

Apart from staff retrenchments, shrinking workloads have forced many firms to institute pay cuts and/or reduced working hours, freeze wages and not replace staff who leave of their own accord in the hope of keeping afloat in this pessimistic building market.

The profession is in crisis and according to Robert Caulfield, who has seen both boom and bust times in the construction industry during his term as RAIA president, architectural firms are heading towards the worst employment slump since the 1930s Depression.

“For part of the current economic situation we have landed in, we only have ourselves to blame. Architects, by their very nature, are competitive and although we talk about social responsibility and co-operability there is a lot of disunity in the ranks. For instance, architects cut each other’s throats by competing on fees rather than working productively with each other,” Caulfield said.

Caulfield criticized state and federal governments which he says have, for some time, consistently ignored RAIA warnings of a major crash in both the commercial and residential building industries.

The RAIA regular six monthly survey “Architectural Staff Levels” looked at employment levels of 350 practices over two periods: June to December 1990 and December 1990 to June 1991.

The survey concludes that staff employment levels have been steadily decreasing since December 1989 and forecasts further declines in the first half of 1991. As of December 1990, the survey found actual staffing levels (all office staff including architects, technical and administrative personnel and draftspersons) were 1.5 percent higher than optimum staffing levels (total number of staff that would be needed to handle workload during office hours), indicating that some firms have been keeping staff on without sufficient work.

According to the survey, between June and December 1990 all states experienced staff retrenchments with the most dramatic employment cuts occurring in Victoria and WA. Employment levels for this period were worse than figures predicted in previous surveys with actual staffing levels declining by 13 percent (forecast 7 percent) and optimum staffing levels declining by 14 percent (forecast 5 percent).

In forecasting the employment figures for the December 1990 to June 1991 period the study concluded that the decline of the past 18 months will continue, although it is expected to so overall. Actual and optimum staff levels are tipped to decline by a further 8 percent next month. However, the study concludes that firms will still have insufficient work for staff after further staffing cuts.

All figures discussed below were taken from the RAIA survey by Heather Olley, research officer, unless otherwise indicated.

Victoria

Victoria registered 20 percent declines in both actual and optimum staffing in the second half of last year. Firms are expecting that to June 1991 actual staffing levels will decline by 14 percent and optimum levels will decline by 19 percent, indicating further reductions in available work. Consequently, it is predicted that there will be insufficient work for those staff still employed

The results from the RAIA study corresponded to a similar study in Melbourne-based company The Avdiev Group who surveyed a total of 40 small, medium and large firms comprising 1,728 architectural staff, between June 1989 and January 1991. The Avdiev study concluded that, between 30 June 1989 and January 1991, 716 people or 41 percent of staff have been retrenched.

New South Wales

NSW experienced an 11 percent reduction in actual staffing and 13 percent reduction in optimum staffing since June 1990. The first half of this year is expected to see a similar rate of decline with actual levels falling by 8 percent and optimum levels falling by 6 percent.

South Australia

SA experienced a 14 percent decrease in actual staffing and 15 percent decrease in optimum staffing in the second six months of the year. A 5 percent decline in actual staff and a 3 percent decline in optimum staffing levels are expected by June 1991.

Western Australia

There were declines of 15 percent in actual and optimum level in the first six months of 1990 but firms were expecting the decline to slow overall in the December 1990 to June 1991 period with actual levels to fall by a further 5 percent.

Australian Captial Territory

Employment levels in ACT architectural offices appear to have been faring better than elsewhere in Australia. Prior to last December, the ACT recorded a 9 percent decrease in actual staffing levels and a 4 percent decrease in optimum staffing levels. By December 1990, actual staffing levels were 3 percent lower than optimum staffing with expectations for both actual and optimum staffing to increase in the first half of this year.

Queensland

Queensland recorded 5 percent declines in actual levels and 10 percent declines in optimum levels in the second half of last year. This decline is expected to slow in the first half of this year with actual levels expected to fall by 4 percent and optimum levels by 2 percent, although according to Robert Caulfield, Queensland is currently following in Victoria’s footsteps and beginning to feel the economic pinch.

Tasmania

Both actual and optimum staff were reduced by 4 percent by June 1990 and are expected to fall by 11 percent in the first half of this year.

Northern Territory

Northern Territory saw a 10 percent decline in actual levels and a 16 percent decline in optimum levels to December 1990. Optimum staffing is expected to decline by a further 4 percent and actual staff by 7 percent to June 1991.

According to an optimistic Robert Caulfield, although architects are facing a lengthy downturn in building activity, all the hallmarks are in place for a speedy recovery when the economic climate improves. Banks have, potentially large amounts of money to loan; developers, builders, building entrepreneurs will need to start creating building opportunities; and construction prices are currently 20 percent cheaper than 12 months ago.

“This means that once confidence returns to the economy this new set of equations will kick start the building industry again,” he said.

Caulfield is looking at innovative ways to generate employment for architects to stimulate the building industry with projects such as the Manufacturing Improvement Programme and placing architects on work-sharing schemes in Japan and Malaysia.

He also advocates that architects can help themselves by initiating private enterprise investment in government buildings and finding developers to get projects such as schools, hospitals and housing developments up and running.

National RAIA forecasts employment increase: ‘First signs of improvement in over three years’

(Originally published in Architecture Australia, November/December, 1992.)

Research by the RAIA has shown an expected national upswing of 2 percent in the employment of architects. This improvement is the first in more than three years.

“While it is still too early to get too excited about this result, it is the first positive news we have seen in a long time, and it suggests to me that our industry, and hopefully the economy as a whole, has turned the corner,” said Robert Cheesman, RAIA national president.

While the figures for employment of architects look better by the end of this year, the overall employment in architects’ offices has declined further. The National Architects Offices Staff Levels Survey, conducted by the RAIA every six months for the past eight years, has shown a further 3 percent decline in employment in architects’ offices over the six months to June 1992, and a further decline of 1 percent in overall employment in the following six months to December 1992 is anticipated. The 3 percent actual decline is better than the 5 percent decline predicted in the last survey released some six months ago.

“The really good news in this latest survey is the increase in the numbers of architects to be employed in the coming six months. A 2 percent increase is anticipated. This is the first positive sign of growth since June 1989 and an indication of higher work levels expected in architects’ offices in the coming six months,” Cheesman said.

“Variations in demand for architects acts as an early warning system for the building industry and the economy at large, as we experience growth or downturns up to two years before the rest of the community. When architects start to experience increased workloads, the projects they are designing will flow on to contractors, builders, product suppliers and all those who draw their lifeblood from the $27 billion per annum non-residential building industry.”

Cheesman said that the RAIA research and employment section monitors architectural demand employment and output nationwide. “During the past five years, we have we have refined our database and our monitoring and forecasting capabilities sufficient to confidently predict future variations in the domestic economy up to two years in advance,” he said.

Victoria

The first six months of 1992 recorded a growth of 5 percent in staff levels in Victoria. Employment of architects in Victorian offices stabilised in the first half of the year, with offices expecting they will employ 2 percent more architect by December 1992 (compared with June 1992 levels). This indicates an expectation of increased available work.

Western Australia

The first six months of 1992 recorded a decrease in staff levels of 2 percent in Western Australia. Employment of architects in Western Australian offices rose in the first half of the year by 2 percent, with offices expecting this level to remain stable until December 1992.

ACT

The first six months of 1992 saw a decline in staff levels of 1 percent in the ACT. Employment of architects in ACT offices fell in the first half of the year by 1 percent, with offices expecting they will employ 1 percent more architects by December 1992 (compared with June 1992 levels), thereby recovering the staff lost in the first half of the year.

New South Wales

The first six months of 1992 saw a decline in staff levels of 8 percent in New South Wales. Employment of architects in NSW offices fell in the first half of the year by 1 percent, with offices expecting they will employ 3 percent more architects by December 1992 (compared with June 1992 levels), indicating an expectation of increased work beginning to flow through in the second half of the year.

Northern Territory

(Note: a small sample size in the NT exaggerates small changes in firms surveyed.) The first six months of 1992 saw an increase of staff levels of 11 percent in the NT. Employment of architects in NT offices remained stable in the first half of the year, with no changes expected to the number of architects employed in during the second half of the year.

Queensland

The first half of 1992 recorded a decline in staff levels in Queensland. Employment of architects in Queensland offices increased in the first half of the year by 3 percent, with offices expecting they will employ 3 percent more architects by December 1992 (compared with June 1992 levels). This indicates a continuation of increased levels of work becoming available into the second half of 1992.

South Australia

The first six months of 1992 saw a decline in staff levels of 2 percent in South Australia. Employment of architects in South Australian offices fell in the first half of year by 6 percent, with offices expecting they will employ 1 percent fewer architects by December 1992 (compared with June 1992 levels).

Tasmania

The first six months of 1992 recorded a decline in staff levels of 16 percent in Tasmania. Employment of architects in Tasmanian offices fell in the first half of the year by 11 percent, with offices expecting they will employ 3 percent fewer architects by December 1992 (compared with June 1992 levels). This indicates a continuing decline in available work.

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