THE Royal Institution of British Architects (RIBA) Future Trends Workload Index for August 2010 is -10, down from -4 in July, 2010.

This further decline means that this is the sixth consecutive month in which this Index has fallen, and the extension of this trend reinforces our conclusion from July’s results that we are likely to see a further reduction in work in progress over the next quarter.

Medium-size practices (11 – 50 staff) continue to be the most pessimistic about their future workload prospects (balance figure -36).

Confidence levels in Scotland and Northern Ireland continue to be particularly low, but there are also signs of a significantly softening market for architects’ services in the Midlands and East Anglia .

The market for bespoke houses and domestic extensions seems to be continuing to hold up well in many areas, but a number of our correspondents have expressed concern about the potential impact of the planned VAT increase and many are expressing the need for interest rates to be kept at low levels in the medium term.

There is also evidence of increased fee competition in this sector. A sustained recovery is likely to be led by the commercial sector, and we will be watching closely for the first signs of this sector forecast returning positive figures

It is perhaps not surprising, given that one quarter of our respondents report being personally under-employed, that reduced hours working continues in some practices.

The current over-capacity in several sectors is leading to intense fee competition, and practices have to analyse the resource requirements of projects and the scope of services very carefully to ensure that they can successfully deliver projects and cover costs.

During the last major recession in the UK construction industry, many practice failures actually occurred in the recovery phase as a result of unrealistic fee bidding and some unsustainable fee levels.

ADRIAN DOBSON is director of practice at RIBA