The results are in: The American Society of Interior Designers (ASID) Second Quarter 2014 Interior Design Billings Index (IDBI) indicates steady, continued and positive momentum for the interior design industry in the months ahead.
The IDBI is a metric used to chart industry growth across all design sectors by surveying small, medium and large firms from different regions of the country on their billings and client inquires for projects including single-family residential, multi-family residential, commercial, hospitality, government, education and healthcare. In June, the ASID IDBI stood at 55.8 and the Inquiries Index was 58.2. While both indices are down slightly from May, these figures remain above 50, indicating positive growth across the design space.
“While the U.S. economy shifted into a higher gear during the second quarter and the composition of growth has improved, some uncertainty remains,” said Jack Kleinhenz, Ph.D., Chief Economist for this research. “The pace of construction and home improvement spending has been growing in fits and starts during the first half of 2014. Although employment for both architecture and design services is up, the second half of the year may increase at a slower pace and could result in positive—though softer—readings for billings and inquiries.”
The majority of the firms surveyed reported increased billings in June with index scores of 50 or above. Smaller firms, with either a sole practitioner or fewer than 10 employees, have reported consistent growth since the first quarter of 2014 as well as year after year. Results for larger firms (those with 25 or more employees) were positive, though imprecise due to the small number of responses. Medium-sized firms (10 to 24 employees) struggled to maintain their positive momentum in March and April, and in June experienced the lowest billings in the past year.
Conditions differed greatly across the regions, ASID firms in the Midwest, South and West all experienced increased monthly billings during the first half of this year. Indices for firms in the West and South stayed above 60 through June 2014, indicating the country’s strongest growth in billings. The Midwest region reported billings increases in every month this year except March and June, when the region’s score fell below 50 and remained at 50 respectively. Interior designers in the Northeast struggled over the past six months, reporting billings increases only in May.
The single-family and multifamily residential sectors reported billings increases in May and June. In the case of single-family billings, that growth extended the momentum from the first quarter of 2014 and the month-over-month billings increases of the past year. The multifamily billings index varied more over the past year, but remained above 50 for eight months.
The commercial sector was not as strong, with only the office sector reporting increased billings in June. While that came on the heels of billings slumps in April and May, office design firms did experience billings increases more often during the past 12 months compared with the other three sectors. The hospitality, retail and entertainment sectors mostly witnessed declines in billings during the first six months of 2014, with the latter two facing eight months of billings declines over the past year. The hospitality sector began 2014 with decreased billings, witnessed a rise in billings in February and ended June with its lowest billings in a year.
The institutional sector showed varied results, with billings fluctuating dramatically over the past six months in government, education and healthcare. The government sector showed increases for the first three months, but slumped in April and May before rebounding in June. The education sector reported increased billings for five of the first six months of 2014, only dropping below an index of 50 in April. Year over year, the education sector experienced one of the most significant billings increases, jumping more than 25 points. Overall, billings at healthcare firms improved markedly from the second half of 2013 to the first half of 2014.
Since 2010, the IDBI has informed the economic outlook for the interior design industry as a whole. The ASID IDBI reflects a lead-time of approximately three to four months between interior design billings and spending. The IDBI was produced by ASID Research, under the leadership of Director Andy Whittaker, in partnership Kleinhenz and Russ Smith, Ph.D., both of Kleinhenz & Associates. It is a diffusion index compiled from a monthly ASID survey of 300 geographically diverse firms that primarily offer interior design services or offer interior design services as part of architectural, engineering and other related practices. The ASID indices are centered on 50 percent (above 50 indicates expansion and below 50 contraction).