Last week, ASID released its first Interior Design Business Performance report, covering the first quarter of 2011. I am happy to say that the news in general is very positive. While most sectors of the building industry continue to struggle, interior design has experienced continuous, albeit moderate, growth during the first quarter of the year. After a slow start in January, business activity has been steadily improving, with positive gains reported across all specialty areas, regions of the country and types of firms.
That is the 30,000-foot view. But on the ground, the picture is more mixed. Some firms say their business has significantly improved over the past two or three years, while others are just barely hanging on, still waiting for the recovery to hit their area of the country. Even among firms that have seen billings increase, business is not what it was like before the recession. One firm principal summed up the frustration that many designers are feeling right now:
I spend more time negotiating fees and budgets, discussing pricing and working on the financials than on designing and marketing. This is discouraging, and I do not see an end in sight. Even our most well-educated clients are asking for special “deals” and reduced fees.
Designers are feeling the pinch, having to scale back hours or downsize their firms. They are hunkered down in survival mode, cutting overhead and expanding their outreach, looking for new markets to tap.
Nonetheless, the majority of designers are optimistic that conditions will improve before the end of the year. One beneficiary of the stalled economy has been the remodeling sector, which has experienced an uptick from homeowners who have decided to improve their current homes rather than buy up. Observed one designer:
There is still a lot of uncertainty with our clients about the current U.S. economy. Many of our residential clients are deciding not to travel this summer … and instead have brought home renovation projects that were previously off-line back to active status.
The numbers are encouraging. But how good or how bad the market is right now comes down to how it looks to your firm.