Market Update: Melbourne Architecture & Interior Design, October 2020
Bruce Whetters – Senior Partner – Melbourne
Welcome to the Melbourne Market Update for Spring 2020, although at this stage this is more of an interim update as we move out off Stage 4 Covid restrictions in the Melbourne Metro area. This week marks 7 months in a work from home situation – quite incredible when you think about it!
Whilst some partial restrictions have been lifted this week, there is no clear time frame from State Government as to when we can head back to the city office, grab a coffee from our favourite spot and work together in a safe way again – and many are starting to think the New Year rather than pre Christmas for this return. We are also contemplating Christmas parties in smaller groups and celebrating what has been one of the more unusual years in a vastly different way.
In a nutshell:
The past 7 months has seen several quite distinct phases, and the length and depth of the past few months in Stage 4 has seen a lower than ideal level of new positions created as many studios continue to win work. New projects are generally smaller in terms of numbers and scale compared to pre-Covid, meaning that many of the roles we have been working on have been quite strategic in their nature, with some studios isolating specific experience to strengthen their overall team mix, with others growing and building teams around winning new project streams; again generally within with smaller to mid-scale studios.
The sentiment from clients about upcoming project commitments is certainly mixed, although a number seem positive and are looking to a point post Stage 4, where there is the belief that new projects will commit.
We are slowly seeing the emergence of State Government initiated projects starting to move, although this has been drawn out more than ideal. Some great news with the recent Footscray Hospital moving to its final selection stage and a bigger spend in the November budget around education is being touted, along with further activity in social housing coming from the federal Budget.
A difficult year:
We all know that this hasn’t been an easy year for many, and we are mindful of those that have been made redundant or are working fewer hours and on reduced pay, many who have now spent 7 months at home in this situation, and we think every day of the mental health, social and financial wellbeing for those in this situation. We also know it hasn’t been easy for many Studio’s with the multitude of pressures that many are encountering, be they busy with projects or experiencing a quieter workload.
Thanks also to everyone who responded to our Covid survey recently – we had a terrific response and it really outlined the pressures and experiences that we have all been facing. Please let us know if you missed a copy of this – it makes for a good read and takes us back to the start of the Covid era – we really are all in this together! Click here to check it out.
BT&P at the coal face:
The team at BTP have worked incredibly hard during this period and we are proud to say that we have been able to maintain working full hours and keep the whole team intact, which sadly hasn’t been the case for many in the recruitment space. We are lucky enough to be working with some extraordinary clients across a range of sectors, and from a personal point of view, commend all that we are working with on how they have, and continue to keep their teams working, morale up and just keep on going forward, despite the strictest lockdown in the country and everyone working from home.
So where to from here?
The reasons for this downturn aren’t financially driven in the first instance, (it may become so, however) so it’s a different environment to the early 90’s and post-GFC markets. There are still developers, Superannuation Houses, and investors cashed up and wanting to move ahead on projects, and already looking at opportunities out there. What we don’t have is a highly coordinated stimulus package from Federal or State Governments directly aimed at Architecture and the building industry generally, such as the BER Program and its benefits in 2009. There is a keen focus on infrastructure projects from Government, and whilst this is great, will only benefit a small number of Architecture firms, rather than a highly targeted spend across social housing, education, health, and higher education sectors that will benefit Architecture and Interiors studios and the construction industry in the short to medium term, and society and our competitiveness internationally in the future.
Critical to the industry is the period through until the end of March 21, and predicting a clear path is not easy. Different firms will have different experiences, that is for certain. When will the lockdown open up again for business? How are developers thinking? What does working in the Covid new normal workplace look like? How do we travel on Public Transport safely? Has Government spending been targeted enough to generate a rebound in activity when things open up, and ultimately how strong will our economy be in the next 12 months?
All these questions will impact the Architecture and Interiors markets in varied ways, and with Christmas coming up, will there be the usual quiet period, or will things fire up quickly? What impact will Jobkeeper have as it phases out and ultimately ends in March? Further afield, what impacts will renewed Covid lockdowns in Europe mean for the world economy? What will the outcome of the elections mean this time around in the USA? What impacts will the export sanctions from China mean for Australia?
Normally I am happy, in fact keen, to make some predictions about what sectors of the market will strengthen or weaken and what directions we see coming up in the market – although as of today, I might hold back a little with bold predictions given all of the above if that’s OK.
Whilst not out of the woods yet, my bones tell me that there are some good things to happen, you only need to look at the resilience, innovation, and positivity of many of our clients through this period to see the desire to get back and get things going!
Please feel free to email Bruce at [email protected] for any feedback or further questions regarding the above.