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.”