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Just how valuable is architecture to UK plc?

Words:
Brian Green

UK architects are in demand overseas, and increasingly so, but the fallout from Brexit introduces many uncertainties

There will be a huge number of architects and architectural practices, both British and from overseas, that will be unsettled by the vote to exit the EU. How will it affect their opportunities, workloads and careers?

Two things are worth noting. Change almost always means winners and losers, though not necessarily in equal measure. And trade deals over services tend to be far more complicated than trade deals over goods, in part because of the intangible nature of services and increasingly because they can be delivered electronically.

The UK relies increasingly on exports of services to support its trade balance. Architecture is such a service and, as recent data has shown, one of growing in importance for the UK.

Last month we highlighted a range of insightful data on employment within the architecture economy from the government’s culture department’s Creative Industries Economic Estimates. What the data also show is just how much architecture is adding to the UK economy by way of exports, and they underpin a good news story for the profession.

So here are a few economic highlights from the DCMS statistics. The economic performance data are not as fresh as the jobs data: they cover up to 2014. But they illustrate the growing economic importance of UK architecture for definitions.

  • Graph 1
    Graph 1
1

The really promising story is to be found in the international trade figures shown in Chart 1. Exports of architecture services were gathering pace just before the 2008 recession. Exports of architecture services expanded fourfold between 2004 and 2008, topping £450 million.

Naturally they took a hit when the global financial crisis hit. But encouragingly, despite a slowdown, the export of UK architecture services has remained strong. In cash terms in 2014 exports almost returned to the highpoint of 2008.

Taking the longer view, when inflation is taken into account exports are about five times what they were in the late 1990s.

  • Graph 2
    Graph 2
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It’s helpful to see the export statistics in the light of the overall activity of the sector. DCMS published economic data released in January, as shown in Chart 2, tracks the gross value added by the architecture industry in and out of recession. (It’s worth noting at this point that the 'architecture economy' is bigger than the 'architecture industry' – for reasons spelled out in the previous piece.)

The data show that even by 2014 the sector had recovered all the lost ground caused by the recession and in the year had added about 7% more value to the economy than at its previous peak year in 2008, after accounting for inflation.

Looking at the trade figures in this light shows that in 1997 exports of services were equivalent to little more than 2% of the gross value added by the UK architecture industry. More recently overseas work has represented more than 10%.

This is important for an industry subjected too readily to alternating periods of feast and famine. In 2010 exports provided some buffer against the pain of the troubled home market, when the value of trade abroad was equivalent to almost 15% of total gross value added by the architecture industry. They may have been troubled times for architects, but they would have been much worse without the expansion of overseas work.

  • Graph 3
    Graph 3
1

Another little gem in the DCMS figures is the data showing where in the world UK architecture is most prominent. So to finish, Chart 3 outlines where the UK architecture industry is doing best. More than half of overseas work is in Asia, with a large slice in China. However, even in the less hungry markets with highly developed architecture industries of their own, such as Europe and the USA, the value of UK architecture’s overseas trade is large, worth £136 million.

The figures underline the now well-recognised belief that, with the global built environment expanding faster than ever and technology reshaping how we live, the potential for architecture and architects is fizzing.

But will the exit vote lead to that potential fizzling out, or to an even brighter future?

That is almost impossible to know. And looking for an answer in trade figures that show just 16% of architectural services exports went to Europe in 2014 would be to miss the point.

First, the EU vote has exposed the complete lack of any coherent plan for how the UK would re-establish its relations with Europe, let alone the rest of the world. We just don’t know what will be settled and how this will shackle or enhance our trade relations.

But much more importantly, the expansion of overseas trade in services from the UK has come hand-in-hand with increasing internationalisation of the businesses that do the trading. Multi-national multi-disciplinary organisations have expanded hugely over recent years.

These major organisations have employed people in the UK on the basis of free movement of labour. And UK practices have expanded into Europe on the same premise.

Until this matter is settled and new rules are in place, all is uncertainty.

That uncertainty, we know, is not good. Practices that thrive on free movement, those that are perhaps more likely to take on international work, will inevitably respond to the uncertainty by being more cautious of expanding in the UK. Meanwhile, it seems inevitable that non-UK citizens working in off-shoots of UK practices with be unsettled over their role and prospects.

But while the vote has created enormous uncertainty, there remains certainty in one important thing – the world seems increasingly to appreciate the services of UK architects.


 

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