Architecture Profits Rise

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Tuesday, June 7th, 2016
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ARCHITECTURE
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Architecture firms throughout Australia are bringing home higher levels of profit as a surge in multi-residential building activity leads to busier offices and more work, the latest survey has found.

Conducted by the Association of Consulting Architects, the survey generated responses from 80 firms in total, 68 of which responded to questions about their workload and profits.

Of these, the number who are experiencing busier conditions compared with last year (39) outnumbered those who were less busy (11) by a factor of three and a half to one, whilst the number of firms experiencing a rise in profits (31) almost doubled those suffering an earnings decline (16).

All up, 14 firms, or 21 per cent of respondents, say they are ‘much busier’ compared with what they were at the same time 12 months ago, whilst a further 25 (37 per cent) say they are ‘slightly busier.’

Six firms, or 8.8 per cent of respondents say they are ‘much more profitable,’ whilst a further 25 (36 per cent) were ‘slightly more profitable.’

ARCHITECTURE

Around most of Australia, architecture firms have benefited from a surge in multi-residential building activity, which saw ground break on a record 220,887 new houses and apartments last year amid particularly strong conditions in east coast markets.

Whilst the rise in profits is welcome, however, some may draw concern from indications that the rate of growth in net earnings does not appear to match that in activity – a phenomenon which suggests that margins remain under pressure.

In other results, architects were generally optimistic about the effect of the federal budget upon their business and the broader profession – a key plank of which revolved around reductions in the rate of tax paid by both companies and by unincorporated businesses.

All up, 27 practices (39 per cent) felt that the budget will have a beneficial effect on their businesses whilst 28 per cent felt it would help the wider profession.

ARCHITECTURE

By contrast, only six and five practices felt that the budget would harm their practices and the profession respectively, with the remainder either saying it would either have no impact or would have both positive and negative effects.

This compares favorably with last year, where more architects indicated that the budget indeed had a negative impact as opposed to a beneficial one.

By contrast, however, architects are less optimistic about the effect of the budget upon broader society, with the number of respondents saying that Australia would not be better off as a result of the budget exceeding those who believed that it would have a positive impact by a factor of two to one.

Those surveyed generally welcomed the measures aimed at promoting opportunities for young Australians but bemoaned what they saw as a lack of any form of positive measures with regard to the environment.

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