Dark Times Ahead? How the Coronavirus is Affecting Architecture

With lockdown measures eased, and construction firms and developers such as L&Q, Morgan Sindall and Bellway beginning to reopen sites, there are positive signs that the worst is over.

Yet, almost 80% of firms have experienced project delays as a result of the pandemic, while almost two third were impacted by site closures. Some 37% of architects have been hit with project cancellations, according to the RIBA survey.

Some 57% admitted that they were experiencing reduced cash flow, as well as increased business costs and unrecoverable outlays. Even as business returns to normal, firms will continue to feel this financial impact, which could result in closures and job losses if the market struggles to rebound.

The pandemic’s impact has been harder felt in certain sectors of the industry, such as university projects, student accommodation and high-tech manufacturing, says Harris. Construction activity in the higher education sector will continue to suffer resulting from the decrease in foreign students, as will activity in the aero sector due to the reduction in overseas travel.

However, changing demand has shifted the focus of workloads to other areas, and will continue to do so as coronavirus is curtailed.

“Some sectors of our workload have been harder hit than others,” Ian Harris, managing director of Maber, says. “However, with the stock market and bank interest rates giving poor returns, we are seeing investors turning to property as a better bet and assembling land-banks, site appraisals and estate strategy services all benefit as a result.”

The Bank of England has warned that the UK’s economy could shrink by up to 14% in 2020, with unemployment set to double in what will be the worst recession in more than 300 years.

Darling estimates that the UK market has experienced a decline of approximately 25% so far in a downturn that has been building since the fourth quarter of 2019, with the pandemic adding to the impact that the UK’s looming exit from the European Union was already having. However, he expects that the market will return “in due course”.

The wider business world, Harris says, is hoping for a tick-shaped recession. This would see economic output take a sharp, short dip before bouncing back up to near pre-pandemic levels, followed by a period of sustained growth over the following few years.

“If the government stick to their infrastructure and investment election pledges and investors move away from poorly performing financial instruments to brick and mortar, we could see decent and sustained growth within 6-12 months,” Harris believes.

“Underlying structural indicators were good going into Q2 2020 and there is no reason to think intentions in that regard have changed,” Harris says.

“The current dip is nothing like the structural defects in the financial world that caused the downturn in 2008/09 and we don’t expect to see the same hoarding by banks following this downturn - indeed, lending for liquidity is a strong sign that the Bank of England and banks more generally think that this is a temporary gap to bridge rather than a slump.”

The global financial crisis of 2007/08 is still fresh in the minds of those in the industry. Given the root of the crisis was the bursting of the housing bubble, the architecture industry was hard hit. In the US, for example, the industry lost more than 175,000 jobs – or 12% of its workforce – between July 2008 and August 2010.

Recession caused by a global pandemic is an entirely different situation, but lessons learned in recovering from the financial crash could help firms to shield themselves from the worst economic outcomes.

According to Harris, the best course of action is to react and change. Those that fail to adapt to new constraints, norms, and demands in the market are those that will ultimately suffer.

“Many businesses who struggled through the last 10 years or disappeared completely were unwilling to recognise the need for wholesale change in their sectors, markets, ways of working and customer base.

“There are several genies that won't go back into the bottle after the coronavirus situation has stabilised and those firms that scurry back to making everything the way it was are the ones that will suffer.”

Even once lockdown measures are removed, the world is unlikely to return to normal. The UK Government has expressed concern that workers may be fearful of returning to work, while an extended period of hygiene and proximity awareness is also likely. It will fall on the AEC industry to develop new spaces that limit the spread of illness and alleviate fears.

According to Rami el Samahy, founding principal at OverUnder and visiting professor at Massachusetts Institute of Technology, workplaces are likely to undergo a substantial makeover, “from the way we enter”, to “the office itself”.

He envisions automatic temperature checks, sanitisation stations, hands-free elevators, and wider walkways becoming the norm in office design. Likewise, the dense, open-plan office is likely to undergo a devolution, with spread out, compartmentalised workstations likely toreturn. There will also be more importance placed on offering access to fresh air and adequate ventilation.

“I suspect there will also be a serious reevaluation of the senior living industry, given the disproportionate toll the virus has had on the elderly,” el Samahy says.

Changes could range from compartmentalised communities, to the introduction of technologies that will allow better communication with friends and family should an outbreak occur.

Firms will undoubtedly emerge with their finances bruised in the wake of coronavirus, but the pandemic will also present numerous new opportunities for the industry to capitalise on.

“In times of adversity, when people have to change, we find it is sometimes the first time they are open to radically new concepts and ideas,” Harris says. “Schools, offices, homes and workplaces are all up for grabs.”