ASID Q2 Interior Design Billings Index Suggests Positive Momentum to Continue: Steady and stronger industry conditions forecast over next six months
Washington, D.C. (August 19, 2014) – 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. 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. As a leading economic indicator of residential and nonresidential improvement spending, the IDBI brings additional perspective to the already established construction indices.
Firm Size Affected Results
Most firms 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 over year. Results for larger firms (those with 25 or more employees) were positive, although 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 Across Regions
ASID firms in the Midwest, South and West all experienced increased monthly billings during the first half of this year. While down from May, 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, when the region’s score fell below 50. Interior designers in the Northeast struggled over the past six months, reporting billings increases only in May.
Billings Varied by Market Sector
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.
“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.”
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.
About the ASID Interior Design Billings Index
The IDBI was produced by ASID Research, under the leadership of Director Andy Whittaker, in partnership with Jack Kleinhenz, Ph.D., 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. Resulting perspectives on current and future business conditions for the interior design industry are helpful indicators of changes in the direction of economic activity. The ASID indices are centered on 50 percent (above 50 indicates expansion and below 50 contraction).
About ASID Research
ASID Research provides the design industry with regular data, studies and reports offering insight and analysis on the state of the industry and practice. Established to educate the design industry on the status of its health and the impact of design on the way we work, live and play, ASID Research offers quantitative and qualitative knowledge of the industry. Our goal is to provide observations, vision and compilations that inspire and inform. Outcomes include the monthly ASID Interior Design Billings Index (IDBI), ASID Interior Design 2014 Outlook and State of the Industry report, third-party collaborations and educational grants.
About the American Society of Interior Designers
The American Society of Interior Designers believes that design transforms lives. ASID serves the full range of the interior design profession and practice through the Society’s programs, networks and advocacy. We thrive on the strength of cross-functional and interdisciplinary relationships among designers of all specialties, including workplace, healthcare, retail and hospitality, education, institutional and residential. We lead interior designers in shared conversations around topics that matter: from evidenced-based and human-centric design to social responsibility, well-being and sustainability. We showcase the impact of design on the human experience and the value interior designers provide.
ASID was founded nearly 40 years ago when two organizations became one — an anniversary we will recognize in 2015 — but its legacy dates back to the early 1930s. As we celebrate nearly 85 years of industry leadership, we are poised to lead the future of interior design, continuing to integrate the advantages of local connections with national reach, of small firms with big and of the places we live with the places we work, play and heal.