Landward Research Ltd’s annual Archaeological Market Survey report for 2016-17 has been published.
Download Archaeological Market Survey 2017
- In financial year 2016-17 commercial archaeology grew in terms of the number of employees working in the sector, but levels of financial turnover decreased and profit levels were unchanged.
- The sector was not as confident as it had been a year earlier.
- The majority of businesses in the sector did not expect to expand significantly in the next year (2017-18) (e.g. in premises, vehicles, capital equipment), but they had increased their staff complements (and continued to plan to do further in the next year). While staffing levels were increasing, average levels of turnover (and so turnover per staff member) were
falling slightly. - This meant that productivity levels were low and falling. Lack of capital investment at a time of staffing increase has been recognised as a component of weak productivity growth across the construction sector, to which applied archaeological practice clearly belongs. This is interpreted as representing cautiousness when times are still uncertain, as adding to payroll is a more flexible expense than investing in capital-heavy equipment or premises, the costs of which are more difficult to reduce in downturns.
- No figures are available for the sector’s investment in research and development.
- The sector continues to have limited confidence in planning policy frameworks, and does not consider that local planning authorities are being provided with sufficient professional advice.
Employment
• An estimated 4,351 people were working in UK applied, commercial archaeology in 2016-17. This was more than immediately before the economic downturn of 2007-08.
• It is estimated that the applied, commercial archaeological workforce grew by 13.2% in financial year 2016-17.
• In comparison with the previous year, the rate of workforce expansion had increased; the applied, commercial archaeological workforce had expanded by 9.9% in 2015-16.
• In 2016-17, the number of archaeological staff providing expert advice to local planning authorities decreased by 3.3% (a loss of 8.9 FTE posts).
• Together, these changes combine to result in the net number of people working in professional archaeology in the UK growing by 8.7% in financial year 2016-17 to an estimated total of 6,253 individuals. This figure combines the numbers working in
applied, commercial archaeology, curatorial archaeology (archaeologists advising local planning authorities) and all other areas of archaeological employment.
• The ongoing increase in jobs with permanent contracts that started in 2014-15 has not been simply a response to an increase in short-term fieldwork, as that would likely be represented by a disproportionate increase in the percentage of fixed-term posts.
Financial Performance
• The average (mean) reported UK turnover for an applied archaeology company in 2016-17 was £2.3m, a decrease of 20% over the year since March 2016. 2015-16 may have been an abnormal year – overall revenue and profitability increased dramatically in that year, and then fell back in 2016-17 (although the medium-term trend is towards growth in revenue and profits).
• In 2016-17, 1% of the turnover of UK applied archaeology companies was generated from non-UK work.
• It is estimated that the total revenue of UK commercial archaeology in 2016-17 was approximately £228m.
• Profit (or ‘surplus’) levels remained low – an average of 5.2%, the same level as reported in 2015-16.
• Salaries typically rose in line with inflation in 2016-17 (CPI at the census date was 2.3%).
• Charge-out rates rose by 3.1% on average. As more staff had been recruited, this may either indicate a rise in value or that lower paid staff are forming a larger part of the workforce.
• Average turnover per member of staff in 2016-17 was £45,309, a slight decrease from 2015-16 of 0.7%
• Many of the largest employers are constituted as not-for-profit organisations.
• Overall, the financial performance statistics suggest that the sector may be approaching maximum capacity – it did not grow in terms of turnover in 2016-17, despite staff complements increasing (meaning productivity was falling), and profit levels had stabilised.
Archaeological Market Sectors
• The overwhelming majority of income came from private sector clients (81%, a slight increase from 79% in 2015-16).
• The most important market sector continued to be residential development, which provided 42% of income (a decline from 53% in 2015-16), followed by commercial and industrial development. The catchall “any other services not categorised above” category provided 8.8% of sectoral income, and increase from 0.3% in 2015-16.
Business Confidence
• While the sector in 2017 was still relatively confident, levels of confidence in future market conditions had declined since 2016.
• The majority of respondents in 2017 expected to maintain or increase staffing levels in 2017-18, although the sector overall was not as confident of doing this as it had been in 2016.
• While there was overall confidence that market conditions would not deteriorate in 2017-18, the sector was not as confident about the future as it had been one year before (which in turn was not as confident as the sector had been in 2015).
• Most respondents expected there would be no business failures in the sector in the next year.
• Respondents generally did not expect to expand their businesses in 2017-18. This was the first time since 2013 that expansion was not anticipated by the majority of respondents. This is surprising given anticipated expansion of workloads and concerns that were raised over recruitment.
Skills, Training and Qualifications
• For the first time since this survey series began in 2008, fieldwork skills were not the area where skills loss was most frequently identified; desk-based or environmental assessment was the area where most respondents identified that they had lost skills.
• As in 2016 and 2015, more respondents reported buying-in skills than reported losing them, with fieldwork skill and artefact / ecofact conservation being the areas where skills were most often bought in from subcontractors.
• It has now become the norm for the areas where training was focussed to match reasonably closely to the areas where skills were being reported as being lost – so these skills gaps (skills that existing staff needed but lacked) were being tackled by investment in training. This has been the case since 2014.
• Employers continue to be supportive of the NVQ in Archaeological Practice, and many would be interested in supporting an Apprentice in Historic Environment Practice.
Forms of Contract
• Respondents typically use an exchange of letters/emails without detailed contracts. However a range of Forms of Contract were identified as being used; ICE standard Forms are not used as often as either contractors’ or clients’ own standard terms and conditions.
Perceptions
• Respondents were unsure whether the economic climate for development would improve in the next year (2017-18), and were less confident of improvement than they had been a year previously.
• Respondents were unsure whether their heritage teams would grow, but were more confident that their teams would not get smaller.
• Late payment of bills and non-payment were both considered to be slightly more problematic than they had been in 2015-16.
• Respondents continued to be unsure about the assertions that either “current national planning policy frameworks are making it easier to justify heritage work and revenue levels” or that “current national planning policy frameworks weaken the case for heritage work and revenue levels”. Sentiment in both cases had become slightly more positive than in 2016.
• They continued to agree that a shortage of heritage staff in local planning authorities was a major constraint on heritage projects (which could affect income generation).
Response Rate
• Response levels were good. There was a slight decline in the percentage of organisations providing data (55.7% declining from 56.4% in 2016).
Future Work
• This study will be repeated to gather data for 2017-18 when it is intended that this will form part of the quinquennial Profiling the Profession project which gathers comparable data from the entire archaeological profession in the UK.
This project has been undertaken on behalf of the Chartered Institute for Archaeologists and the Federation of Archaeological Managers and Employers, and is funded by the clients and Historic England.
