The American Society of Interior Designers (ASID) released its Interior Design Billings Index (IDBI), a s statement on the latest trends and best practices in design as well as an indicator of the economic health of industry, showed a pattern of steady growth, with positive projections for 2015.
According to the report, the design sector saw growth, with only one month indicating a lack of growth (that is, an “index value” below 50) in the last 31 months. To summarize, fourth quarter business conditions were healthy, but at a moderate pace. However, when broken down across business size and region, the index shows a greater variation of results.
ASID IDBI fourth quarter summary statistics.
Small (two to nine-person) firms and larger (25-plus-person) firms both reported billings increases at year-end. Sole practitioners, on the other hand, reported a slight downward trend. The report also noted that there may be a seasonal component to the decrease in the index, as a downturn in the December index from the November index has been observed in three of the past four years.
ASID billings by firm size, Dec. 2013 to Dec. 2014
Regionally, the Midwest showed a pickup in business conditions through the fourth quarter, and the South and West showed signs of growth, though slower than recent years. The Northeast showed a seasonal turndown, and it was speculated that the particularly harsh winter—the record cold brought by the Polar Vortex in combination with the record snowfall—had a distinct negative impact on business conditions.
ASID billings by region, Dec. 2013 to Dec. 2014.
Despite the regional slowing, the ASID IDBI against the Conference Board and Dodge Momentum construction spending indexes were still high, with a positive outlook forecasted for the next nine to 12 months. Private residential and nonresidential construction spending is expected to increase in the coming year and, overall, positive business conditions should remain on track for the next six months.
Six month outlook comparison, ASID, Conference Board and Dodge Momentum Dec. 2013 to 2014.
CEO Randy Fiser, who travels the country collecting information from the interior design community to support the index said that the numerical findings were very much seen in his personal research, especially the struggle of medium-sized (10- to 24-person) firms against the growth and success of the smaller and larger firms. He said that one factor contributing to this occurrence was that now larger firms are aggressively competing for smaller spaces traditionally occupied by the medium-sized firms. Additionally, multinational organizations want a local presence for design firms, which led to many mergers and acquisitions, and many 10- to 24-person firms being bought out.
Though the index uses completely self-reported data through a survey of interior design firms on billing performance, the report is otherwise verified through standard best practices for economic research. The positive trend seen through this quarterly report is supported by the 7,000-plus interior design jobs added since 2010, as reported by the U.S. Bureau of Labor Statistics.
Interior Design and Architectural Services Payrolls Nov. 2011 to Nov. 2014, 12 month net change in employment. Images courtesy of ASID.
The quarterly billings index uses 50 months of data to provide a comprehensive look at the industry, as well as determine where the sector is likely to head up to six months out.
The fourth-quarter report keyed in on trends from December 2013 to December 2014, with extra data from early January 2015 on business conditions.