WA100 2023: For architects in 2023, size matters

What a difference a year makes! Last year’s survey of the world’s top 100 architectural practices revealed almost unprecedented levels of optimism about the health of the global construction economy over the next 12 months. This was in stark contrast to the downbeat, pandemic-driven results of the 2021 survey – and with the benefit of hindsight, appears to have been the result of pent-up demand blossoming after a year of lockdowns. The 2023 survey reflects a more sombre world of conflict, inflation and deglobalisation. Compared with the three-quarters of firms that thought there would be growth in 2022, only half feel as confident about the coming year.

Despite a drop in confidence about growth, the big firms keep getting bigger. Gensler, which retains top spot for the eighth year running, busts through the 3,000-architect barrier for the first time. The US behemoth added 377 architects to its payroll this year, taking the total up to 3,069. The other top 10 firms also grew their numbers, with the survey indicating this is a trend likely to continue in 2023.

Over half of firms said they weren’t planning on letting any architects go this year, slightly more than last year. And every firm bar one said they were intending to recruit over the next 12 months, with 21% of firms intending to hire more than 50 architects. This chimes with firms reporting a shortage of experienced architects and a desire to hang on to their staff. And big global firms with international networks of existing offices are better placed to capitalise on work opportunities in regions that are difficult to break into than are smaller new entrants.  

International networks of offices will also help firms to weather the ongoing geopolitical challenges more readily, as this means big practices will always have a presence in areas that are on the up. This year’s survey reveals this is a useful strategy, as sentiment about the best places for growth has markedly changed from last year. The Middle East, long regarded as a relatively small and steady market since the boom days of the noughties, is now seen by architects as offering the greatest potential for growth this year.

Big practices will always have a presence in areas that are on the up. This year’s survey reveals this is a useful strategy, as sentiment about the best places for growth has markedly changed

The success of the football World Cup, despite the controversies, has put the region firmly back on the map. There is also more money around, because Putin’s invasion of Ukraine has driven up oil prices. Qatar is in a particularly good place as it has vast reserves of an even more precious commodity, natural gas. Firms that have maintained a presence in the region stand to benefit from a construction boom on the back of this, and oil prices – which have dropped back from the early days of the invasion – are unlikely to fall much further, as demand will increase once China recovers from the jump in covid cases after the easing of restrictions and returns to business.

Conversely, the war in Ukraine is bad news for European firms. Only a third expect growth in Western Europe and 47% expect stagnation, a big drop in confidence from last year. Europe is struggling with high gas prices and inflation, a situation that won’t radically change until the war ends.

Architects are having to adapt to a raft of post-pandemic challenges including high levels of inflation, a phenomenon that young people are experiencing for the first time. This is impacting on project viability, with the risk that projects are more likely to be put on hold. Additional pressure is being piled on architects, who are having to value-engineer designs to try to keep costs under control.

Clients are increasingly demanding low carbon buildings in a bid to meet regulations and keep operational costs down. Demand for more sustainable buildings is particularly strong in Europe, Australia and, increasingly, in traditionally energy-profligate countries such as the US and Saudi Arabia. And multinational clients expect the same standards regardless of where their buildings are located. Notably, more firms are responding to this trend over the past year by establishing dedicated sustainability teams. And some are setting minimum environmental targets for all their projects.

Looking ahead, the only certainty for this year is more uncertainty, as the old global order fragments. There is no end in sight to the war in Ukraine, and China is becoming increasingly isolated under Xi Jinping. Architects are reporting that US clients are pulling out of China and say an increasingly nationalistic mood means doing business there is becoming more difficult. There also are concerns about China’s intentions towards neighbouring Taiwan. UK folding-bicycle manufacturer Brompton says it is drawing up plans to shift parts of its supply chain out of Taiwan and China because of regional tensions, and others will almost certainly follow suit.

On the flip side, the moving of supply chains to new locations could provide opportunities for architects, and the continuation of elevated energy prices means investment in low carbon building design skills should provide better and earlier returns. Firms that are adaptable and relish new challenges will be the ones that flourish in this increasingly uncertain world.

Thomas Lane, WA100 editor

Read the digital edition here