The architectural profession is inextricably linked to the building industry. When the architectural practices are busy, the construction industry normally feels the increased activity by the architects six months to a year in the future. Unfortunately for the building industry, the architectural practices have reported that the effects of the COVID-19 pandemic on future projects has been devastating.

The construction industry has been in decline for the past year and the effect of the lockdown has been catastrophic. The South African Council for the Architectural Profession (SACAP) has commissioned a survey of 1, 800 practices employing over 12, 600 staff members and reports as follows:

• 7% of staff have already been retrenched (+900 people)
• Planned retrenchments fall between 16% and 27% (+3400)

It stands to reason that if the architects do not have many future projects, this will affect our members in the future. With an already shrinking order book, most members must take cognisance of this barometer of the future and plan accordingly.

Members should pay attention to the following in the management of their businesses:

• Insist that your clients meet their payment obligations in terms of the contract agreement.
• Do not buy any major items of equipment with long term finance.
• Try not to have plant in your yard that is not being utilized. Rent out your excess plant to companies that have good credit ratings.
• Do not price projects at below cost in order to retain staff and keep plant from standing.
• Make sure that if you provide your client with a construction guarantee, you receive a payment guarantee.

In this extremely challenging period, look at every expense that your company is incurring on a monthly basis. Evaluate any expense that is not directly related to your on-site procurement for current projects. If this expense falls into the “nice to have” category, consider terminating this expense.

Creating a leaner construction company now will yield success in the future.

Ross Stembridge | Building Services Manager