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2016 Interior Design Billings Index 4th Quarter Results Show Cautious Growth

Research from ASID showed that the 2016 economy was on firm footing, but interior designers remain cautious.

Alison Martin
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Interior Design Billings Index
Interior Design Billings Index

Interior designers remain on edge even as the latest research from the Interior Design Billings Index (IDBI) showed signs of economic growth in 2016. The research, conducted by American Society of Interior Designers (ASID) Research, points to positive consumer spending and positive billing results.

The IDBI is produced by ASID Research in partnership with Jack Kleinhenz, Ph.D., and Russ Smith, Ph.D., both of Kleinhenz & Associates. The index is 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. Practitioner perspectives on current and future business conditions for the interior design industry are a helpful indicator of changes in the direction of economic activity. The ASID indices are centered on 50 percent: a score above 50 indicates expansion, while a score below 50 denotes contraction.

Overall, the fourth quarter showed a positive demand for the design industry. Throughout the year, the ASID IDBI stayed over that 50 percent mark. By region and size of firm, that number differed. Design firms across the country also saw varying results by region. The South, West and Northeast all ended the year strongly above the 50 percent mark. The Midwest region saw choppy results. Sole practitioner design firms ended the year with an IDBI score slightly below 50 (49.4). Firms with 10-24 employees saw a contraction.

Though many firms seem to worry about the next economic downturn, Kleinhenz advises them not to worry.

"There always about a 10-15 percent chance of a recession," Kleinhenz says, "but given what the data is showing us, the economy looks very good. 

Despite positive economic indicators, the Business Survey Report, completed by interior designers, showed that people were still cautious about the economy. The report said:

- Survey responders showed great concern over the current political climate. Some worry when the next recession or economic downturn will happen.

- Survey responders said staff optimization (hiring new people, outsourcing, better staff allocations, downsizing) and client engagement (client referrals, more direct contact with industry, social media and other digital advertising) made the biggest differences to their businesses.

- Changing focus (moving to consulting work rather than projects, finding balance between work/life) and moving to better fitting office spaces also made an impact on businesses in 2016.

- When it comes to the properties of materials used, designers said consumers were most interested in the maintenance for the material. Consumers were only somewhat aware of sustainability factors.

This year in particular, responders were more anxious about the results of the 2016 presidential election and how the new administration's policies will affect the economy and consumer confidence. 

"The political situation has created tremendous sadness and uncertainty," one survey taker said. "People are taking a wait and see attitude.”

Others were slightly more optimistic.

"I think with the new administration focused on improving the economy, it will only help our industry as well as others," another survey taker said.


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