Business insight – Part II : UK Perspective
Message from Atlas Business Development Director UK,
“2020 was undoubtedly a tough year for most in our industry but as it drew to an end and we moved into the new year, despite the second (or is it now the third?) lockdown, we have started to see an improvement in confidence and a definite upturn in new enquiries.”
The December RIBA Future Trends Workload Index (the balance between those expecting more and those expending less work over the next three months) supported this at +10, its highest level since February 2020, back when most of us thought Coronavirus was something happening somewhere else.
One of the economic surprises of 2020 was the residential property market. Each previous recession in my memory has been associated with a collapse or at least a drop in house prices. Whether it was the dam of pent-up demand from the first lockdown bursting, the stamp-duty holiday, or people reassessing where and how they live their lives, the market has remained buoyant. Medium and large-scale residential work has long formed the backbone of Atlas’s UK business and last year was no exception with it accounting for nearly 50% of our workload.
Despite working-from-home being the norm over the past year and predicted to remain more common even when the pandemic subsides, the commercial office sector accounted for a third of our 2020 workload. This maybe an anomaly as several of our clients are especially strong in this sector. We also managed to work on three hotel projects over the past year although two of those started in 2019 when the hospitality was much stronger.
Unsurprisingly, the COVID-19 crisis has almost ended what little activity was left in the UK retail sector. The small amounts of retail work that Atlas did in 2020 has been from UK firms working on international projects or the relatively modest retail component of larger residential led mixed-use developments. It will not be long, we hope, before we receive enquiries related to the repurposing of former retail buildings and I see that there is already activity from some of our clients around this.
Another predictable but more positive trend we are experiencing, in the form of new enquiries and live projects, is data centres, demand for which is being driven by increases in cloud computing, which in turn is being generated by us all working remotely and organisations implementing more robust business continuity strategies.
We are also optimistic about the healthcare sector and, while this accounted for less than 5% of our 2020 workload, it seems that the increased government spending is starting to generate work for firms with existing healthcare capability. Atlas has a wealth of recent experience in this sector internationally and we hope that our UK clients will be able to benefit from this over the coming years.
Encouragingly, we have not lost many projects over the past year. Some have been delayed and, understandably, a lot of our clients have retained work that might normally have come to Atlas to keep their own employees properly utilised. Increasingly though, as our clients’ workloads do stabilise, many are recognising how Atlas can help them maintain the agility that will give them a competitive advantage in what is going to remain a challenging market.
Connect with our team today to find out more and hear how Atlas can support with your business ambitions.