Workloads have fallen for the sixth consecutive month, according to the latest RIBA Future Trends survey.
The number of practices expecting an increase in workload has fallen and nearly a third expected their workload to decrease in August.
The survey predicts a further decline in work for architects over the next quarter.
There continues to be little evidence of a recovery in employment prospects for salaried architects, with only 4% of practices expecting an increase in staff in August.
The survey identified the greatest pessimism in commercial and private housing, in medium-size practices (11 to 50 staff) and in Scotland and Northern Ireland. However, there were signs of hope in the Midlands and East Anglia.
While the market for bespoke houses and domestic extensions seemed to be holding up well in many areas, the survey revealed many respondents were gloomy about the impact the VAT increase would have.
Adrian Dobson, RIBA director of practice, said: “It is perhaps not surprising, given that a quarter of our respondents report being personally under-employed, that reduced-hours working continues in some practices.
“The current over-capacity in several sectors is leading to intense fee competition, and practices have to analyse the resource requirements of projects and the scope of services very carefully to ensure that they can successfully deliver projects and cover costs.
“During the last major recession in the UK construction industry, many practice failures actually occurred in the recovery phase as a result of unrealistic fee bidding and some unsustainable fee levels.”
Archial has been put into administration and is up for sale just days after it suspended trading of its shares.
It emerged today that the listed London-based practice, formerly known as SMC, was unable to agree repayment terms over unpaid tax owed to HM Revenue & Customs and appointed joint administrators David Chubb and Graham Frost of PricewaterhouseCoopers, who are now seeking a rapid sale of the business.
Chubb said: “In response to changes in market conditions, Archial Group PLC had taken a number of steps to improve operations and to develop a sustainable and profitable business going forward.
“However, due to difficulties in meeting the group’s financial obligations, the directors have concluded that various companies in the Group, including Archial Architects Limited and Alsop Sparch Limited, should be placed into administration to protect the business and assets. “
On 26 August, the practice, which employs 400 staff worldwide including around 200 architects, announced its full year results would be “significantly below market expectations” as a result of the unpaid tax.
A previous update in May by the firm - which is led by chief executive Chris Littlemore - said trading for the first four months of the year was in line with management expectations. It had forecast to make a pre-tax profit this year of £3.4 million on turnover of £30.5 million.
Earlier this year, Archial started work on a £27 million mental health facility in Dumfries and in May the practice, one of two listed on the London Stock Exchange’s Alternative Investment Market (AIM), said it had £60 million worth of jobs in the pipeline.