Most architectural practices have suffered a slump in revenue of 40 per cent or more over the past two years
ARCHITECTS WERE the first professionals to be hit by the recession, with new projects drying up due to the downturn in construction. According to estimates by their own institute, the RIAI, 42 per cent of those employed during the economic boom are now redundant.
Most architectural practices have been forced to shed staff, in many cases by well over 50 per cent, while those who remain have had to take huge pay cuts – with a 20 per cent reduction in salaries for employees not uncommon and double that for partners seeking to save their firms.
Derek Tynan, partner in DTA Architects, said that’s why they took “huge offence” over remarks made by Tánaiste Mary Coughlan in July that architects were among the professionals who had yet to feel the “chill winds of economic reality” – and cut their fees accordingly.
“She was talking about people who have lost half their work, let go more than half their staff and taken huge cuts in their salaries,” he said, adding that the old days of charging a 6 per cent standard fee had “gone since the mid-1990s”, at the very outset of the boom.
In any case, with building tenders down by as much as 30 per cent from their peak in 2006, architects’ fees have been reduced correspondingly. On top of that, by Government direction, they have had to take a further 8 per cent cut for all public sector projects. Most architectural practices have suffered a slump in revenue of 40 per cent or more over the past two years.
“We’re caught in a classic pincer movement, with public sector projects put on hold and few private sector projects proceeding because of the state of the market.”
Another leading architect, who did not wish to be identified due to fears about undermining confidence in his practice, said he had three major social housing projects and two schools on hold, while the private sector work being commissioned was all “small-scale stuff”.
A third architect, who has been in practice since the 1980s recession, said the precarious financial position of many firms was made worse by public-sector clients not paying fees for work done.
“We’re owed €100,000 by a local authority – and they don’t even reply to letters.”
The banks are also blamed for aggravating the problems faced by architects as small or medium-sized enterprises – by refusing, for example, to honour a cheque in favour of the Revenue to meet a tax bill until the sum involved was covered by an equivalent lodgement.
Having to let good staff go has been traumatic for architects, many of whom would have had built up a multicultural team in their offices during the boom. “It’s been personally upsetting for us to tell people we liked and worked with that they’d have to go,” Mr Tynan said.
Many of the foreign nationals who worked here as architects have either returned home or gone somewhere else to work, while hundreds of mainly younger Irish architects laid off by firms are on the dole or scratching around for work doing domestic extensions.
The main regret among seasoned architects now running slimmed-down practices is the loss of such a large chunk of the skills base built up during the boom – even as the value of those skills is still being recognised by numerous awards for projects already completed.
“Young architects who are married with a child or two and a mortgage to pay are going through a really tough time,” said Alan Mee, who runs a small practice and lectures in urban design at UCD. “After producing such a great culture, there’s a lot of bitterness out there, I suspect. Psychologically, it’s really unsettling because there is no version of a few years time that’s in any way clear at all.
“What’s the future client base for a small practice? It’s completely unknowable, so there is no clarity on which to base a business plan, least of all in terms of fees.”
He said the boom “made people think that a small architectural practice could feed itself forever, but this was an illusion”. Architects were now diversifying “very quickly”, doing building energy ratings, urban design, conservation, sustainability, writing more or teaching.
“There is a resilience among architects, a belief that they have a real contribution to make – not least in relation to the direction of any social dividend that might arise in the working through of Nama by providing masterplanning and urban design skills,” Mr Tynan said.
They are unanimous on one issue: now is the time to build, because construction costs are so low. “Instead of behaving like a rabbit in headlights, Government, State agencies and local authorities should be gathering their guts to build for the future,” as one architect put it.