Market Update: Sydney Architecture & Interior Design, December 202330th November 2023 / Market Updates
Welcome to the Sydney Architectural and Interior Design Market update for the fourth quarter of 2023, an interesting year it has certainly been.
A year that is possibly best characterized by its unpredictability let’s see what’s been happening at the coal face these past 3 months and then consider what may lay beyond in 2024…
As outlined above – Architecture has continued to experience project highs and lows in regards to activity levels. Overall, it will likely come as no real surprise that the market in Architecture has been a little slower than we would like to have seen over the last quarter in NSW, with a number of larger companies having to take the tough decision to make redundancies. Generally speaking, this seems to impacting most sectors, with no one particular industry doing it tougher than others from what we are hearing. Larger infrastructure and a couple of major developments have come to a natural end and as can typically be the case, the larger practices have not had the volume of work to move all employees coming off these large projects, onto something new.
Increased Interest Rates, rising Construction Costs, slow planning approvals and government spending changes are all contributing factors to the slower market at the moment.
That said, there have been some very solid pockets of work during the last three months in Architecture, including a busy hospitality sector, strategic work in the Multi-unit Residential sector and some healthcare work bubbling along nicely.
The high end, single residential market is also still relatively strong although not at the same levels as during Covid, when it was exceptionally busy in this sector.
As it stands, the sentiment from our clients for next year is mixed, from uncertainty about what lies ahead to that it will be a better year and potentially quite busy. This will be well received by candidates that are currently between roles as we know it has been quite tough for a few recently.
In terms of the roles we have seen over the last 3-4 months. Good, experienced Architects with Multi-unit Residential experience, especially those with strong Design skills have been snapped up. There have been some Revit production roles come in on contract basis and also a couple of Interiors studio looking for registered Architects to help them out on Residential new builds and alts and adds.
We have also seen a number of Senior positions listed over the last quarter at Director/Principal level as some practices are looking more strategically at the years ahead.
So, what has been the bi-product of this slower market? Well one thing we have seen is a slight tempering of salaries. Until the end of 2022 the graph reflecting salaries in Architecture looked like a hockey stick. Wages were rising at an incredible rate, as were the expectations of the candidates we were meeting and no one knew where it would end, given the lack of supply of candidates. This has definitely plateaued over the last 6 months as a few more redundancies were announced in the industry. Within Architecture we are advising candidates toward a more conservative approach when it comes to salary negotiations, pointing out that they may be one of many being interviewed for a particular position, which of course can be challenging in an economic climate in a ‘cost of living crisis’. The good thing is that salaries are still competitive and have not gone backwards, more just settled, and the expectations with it.
So, in all Architecture has been very much a ‘mixed bag’ with workflows and pipelines being somewhat difficult to predict. Certainly, though a different year to the previous covid dominated ones where Candidate availability was non-existent.
Conversely, the Interiors market in Sydney is still chugging along pretty nicely with most areas of the sector providing opportunities for candidates. We currently have roles in high end Residential, Commercial, Hospitality and Retail Design. The focus on these roles is trying to find candidates at a mid-level (3-4 years) and above and generally with good experience from concept design through to delivery.
Generally, candidates with previous Revit or Vectorworks experience get snapped up the quickest, whilst candidates who are AutoCAD skilled, finding it tougher to find a role.
In particular over the last quarter the hospitality sector has probably been our busiest sector with work in pubs, clubs, hotels, restaurants and bars as Sydney comes back to life, post Covid.
It is pleasing to see Interiors busy, but we would also note that generally speaking hiring patterns are more considered and Clients are keen to ensure they take on the right people who tick most if not all of the desired boxes.
Good bye 2023 and welcome 2024…
So, as we near the end of 2023, we can say that it has been a year that saw economic forces impact activity levels in our sector. A year of the ‘haves and have nots’, where some firms where incredibly busy and others making redundancies, with some Candidates getting numerous offers and others finding it challenging to find the right opportunity. All to say that as we move into 2024, it seems to feel like we may be in for more of the same for a while at least – a market that is busy yet slow with everything in between. Government spending will of course dictate in some areas activity levels as will interest rates and inflation.
So whilst perhaps not an easily predictable year may lay ahead, all signs point to another very interesting and diverse 12 months. So let’s get into it!
ARCHITECTS AWARD CHANGES – Effective 1st January 2024
A quick reminder following the decision in October from Fair Work confirming that the “Prescribed Competencies”, will be replaced in The Architects Award effective January 1, 2024.
This is particularly relevant for Graduates of Architecture who will sit their Architectural Practice Examination after January 1, 2024.
Please access the following link which outlines these changes. https://www.fairwork.gov.au/newsroom/news/changes-architects-award
Partner – Sydney