The only way is up

Earnings are starting to recover – but are still off their pre-recession peak. Aziz Mirza discusses architects’ fortunes this year

Unemployment is down, earnings are up. This year’s survey confirms that the recovery is under way and reaching pretty much all sectors of the profession, although it’s less even geographically. Figures published up to 1 April 2014 show architects’ average earnings standing at £42,000: five per cent higher than last year’s figure, and convincingly higher than the £40,000 to £41,000 averages recorded in the previous four years. The strength of the improvement in the last 12 months is confirmed when comparing with inflation data – CPI inflation rose by two per cent during the year, implying that architects enjoyed a ‘real’ increase of 3 per cent.

But put the earnings survey data into a longer term context and we find that there is still some way to go until the profession’s earnings catch up with pre-recession levels. Average earnings were higher in 2008 (at £42,250) and 2009 (£45,000). So unlike the British economy, which earlier this year saw GDP pass its pre-recession peak, architects’ earnings are still lagging – by seven per cent, in fact. While this latest survey shows that average earnings increasing, the rise is not yet euphoric.

London in the lead
In the quest to return to 2009 earnings levels, London is leading the way. This year’s average of £47,825 in the capital is very nearly as high as the 2009 peak value of £48,350. Architects in the South East and the South West & Wales are within five per cent of their 2009 peak. But average earnings for architects in the Midlands & East Anglia remain 11 per cent lower than the 2009 peak, while in the North of England they are 14 per cent lower. Data for Scotland was not available in 2009. But data for Northern Ireland, though based on a small sample size, is unique in this survey for suggesting that average earnings for architects in the region are actually higher now than they were in 2009.

Architects’ average earnings stand at £42,000: five per cent higher than last year

Nationwide, the survey shows that architects’ average earnings have increased by five per cent this year. Most employment groups record an increase over the 12 months; only the earnings of principals in partnership have not changed.

The largest percentage increase has been in the earnings of sole principals, which is seven per cent higher than it was last year. This reverses last year’s fall and returns average earnings to a level similar to that seen in 2012. However, both the upper and lower quartile figures for sole principals are lower this year – the lower quartile in particular fell from £18,500 to £15,000.

For principals in partnership, the figures show no change in average earnings but here both upper and lower quartile figures have increased, each by over four per cent.

Salaried architects working in private practice recorded a three per cent rise in their average salaries over the period, with the figures also showing that both upper and lower quartile figures have increased too.

The top 25 per cent of partners and directors are now earning more than they have at any time in the last six years

Gains in government
In the public sector, average salaries are higher by three per cent for local authority architects, and by four per cent for central government architects. Private in-house architects also record an average increase of three per cent. 

Again, if we look at where the profession is now compared with 2009 peak values, all but one staff category has yet to exceed its peak value. That one exception is architects working for central government, whose average earnings now are £51,500 – well ahead of the £46,389 recorded in 2009. Part of the reason for this rise may be, however, that there are fewer architects working for central government now than there were five years ago. Average earnings for salaried architects working in private practice are approaching 2009 levels; lagging by just three per cent. But partners’ and directors’ pay remains nine per cent behind 2009 rates.

There’s one interesting finding for partners and directors – the upper quartile figure this year is in fact higher than the 2009 upper quartile. In fact, it’s higher than any upper quartile recorded since 2008. This means that the top 25 per cent of partners and directors are now earning more than they have at any time in the last six years. 

The largest pay gap between now and before the recession is experienced by sole principals. Despite enjoying the largest rise of any staffing group this year, sole principals’ average pay remains 20 per cent lower than in 2009. In fact, this employment group – unlike any other – recorded peak pay in 2008 rather than 2009; so in fact sole principals’ average pay is currently even lower – by 29 per cent – than their previous all-time peak. We have suggested reasons in previous surveys for the fall in sole principals’ pay – partly it is due to the fact that this employment group has grown over the past five years, absorbing newly redundant or unemployed architects from larger private practices, who prefer to set up on their own as new practices than register as unemployed.

Recorded unemployment – and we stress the word ‘recorded’ since architects as a profession are highly reluctant to be ‘unemployed’ – has fallen back sharply in the last two years, from around three to four per cent during the recession to just under one per cent now. While still higher than the negligible levels recorded between 2005 and 2008, the statistic is balanced by our estimates of the number of architects in the workforce, which has increased by 1,000 in the last year. We estimate that the workforce contains an estimated 27,700 architects, with 23,100 of them working full-time. Both estimates are higher than in 2009.

Aziz Mirza is a director of The Fees Bureau