The key building markets for architectural services have displayed divergent trends over the past five years
Melbourne, Australia (PRWEB) February 22, 2015
The Architectural Services industry has endured a tough five years due to a prolonged downturn in the building construction market. Over the past five years, the winding back of educational building investment and weak non-residential construction markets has led to subdued demand for industry services. Revenue is estimated to rise by just 0.5% annualised over the five years through 2014-15, corresponding with a slump in the value of total building construction over much of the past five years. According to IBISWorld industry analyst Sebastian Chia, “The key building markets for architectural services have displayed divergent trends over the past five years.” In the non-residential building market, the value of institutional building has benefited from the injection of federal funding for school refurbishment under the Building the Education Revolution (BER) program. In contrast, the value of commercial and industrial building is expected to fall because of slower economic growth due to low business confidence and investment. Architects have also faced subdued demand from the new housing market, with the value of construction remaining flat over the past five years. Declining investment trends in the traditional single-unit housing market have offset growth in the townhouse and apartment market. In 2014-15, the industry is forecast to generate revenue of $6.4 billion, rising 2.0% from the previous year. Rising investment is expected in the single- and multi-unit housing sectors, due to record low interest rates and an expected recovery in economic growth.
“The industry has been facing growing competition from vertically integrated firms in the building construction and engineering consulting industries over the past five years,” says Chia. Clients are being attracted towards more integrated service offerings, and architecture firms will need to improve links with construction firms or even offer their own range of similar services to compete. This is difficult due to the nature of the industry, which has a fragmented structure with few large-scale national players and many small-scale firms that operate in narrow regional markets. These trends are forecast to grow over the next five years. Despite growing competition, demand conditions are forecast to strengthen over the five years through 2019-20, due to improved investment in the commercial and residential building markets.
The Architectural Services industry has a low concentration of ownership. It has a fragmented structure, with few large-scale national players, a larger number of state or regionally based firms (influenced by the requirement for individual state registration) and many small-scale firms and sole practitioners operating in narrow regional markets. Only about 1.6% of businesses employ more than 20 staff.
For more information, visit IBISWorld’s Architectural Services industry in Australia report page.
This industry includes establishments that mainly provide planning and design services for buildings and structures, or for land development. Industry activities and expertise may include design, construction procedures, zoning regulations, location and land use, building codes and building materials.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.