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ASID Interior Design Billings Index (IDBI) Q4 Report

An increasing number of respondents reported a pull back in business conditions since mid-2017.

The pace of billings growth dropped during the fourth quarter of 2017, with the December ASID Interior Design Billings Index (IDBI) score dipping to 47.8 from September’s score of 55.6 (scores about 50 indicate industry expansion, while those below 50 indicate contraction). The decelerating trend, combined with a sub-par inquiries score of 47.8, suggests that market conditions going into 2018 are somewhat indefinite. The December index is weaker than its three-month moving average of 52.3, indicating a continuation of declining scores reported since mid-2017.

Fourth quarter demand for interior design services varied across the four size cohorts.

Sole practitioner design firms reported a modest decline in quarterly performance on a three-month moving average, but remained in expansionary territory in the fourth quarter. Slightly larger firms with two to nine employees maintained a positive trend and showed a three-month moving average of 58. Larger firms of 10 to 25 employees fared less well during the year, reporting sub-50 scores in five out of 12 months in 2017.

Billings growth varies across regions for interior design services.

Three of the four regions, Midwest, South, and West all reported strong (greater than 50) three-month moving average IDBI scores in December, finishing the year with strong billings growth. Interior design firms in the Northeast, however, experienced a notable fall off in business, registering an IDBI score of 40 at the end of the fourth quarter.

Business conditions for the year were positive for residential design services, but commercial and institutional design services struggled.

Design firms specializing in single-family and multifamily residential projects reported growth throughout the year, posting scores above 50 every month. The exception was December, when firms serving the single-family design market reported an IDBI score of 49.2. Commercial and institutional design firms displayed an uneven and slower paced pattern of billings in 2017. Firms specializing in institutional projects rose to a score of 51.7 in December from 31.7 in September. Although the three-month moving average for institutional design firms was 49.4, and better than its third quarter score, their performance remained in contractionary territory. The December commercial IDBI three month moving average score was 48.8, up slightly from a September score of 47.7.