The June 2012 ASID Interior Design Index results signaled broad growth in the industry. While the Billing Index dropped by 6 points to 56.5 from its March level (62.5), June’s score marked the sixth straight month that revenue has risen. A score of 50 indicates near-term growth for the industry. Also on a positive note, firms are hearing more and more about potential projects. Inquiries scores show another month of strong growth, with June now the tenth straight month that the score for inquiries has been above 50.
Although the Index has declined a couple of points each month for the past three months, matching the overall slowing in the economy, responses suggest that a greater percentage of ASID respondents are experiencing growth. The percent of respondents reporting business has remained “about the same” has decreased while the percent reporting “significantly increased” has increased over the past three months.
Smaller Firms Faring Better
Firms of between 1 and 9 employees posted a billings index of 50 or above for each of the past three months. Mid-sized firms, which had done well during the first quarter, reported a decrease in June.
Firms in the Midwest, South and West regions reported continued gains in the second quarter, while the Northeast showed gains for only the past two months. The West region, in particular, has reported increased billings every month since August of 2011
Housing and Hospitality Leading the Way
Housing and Hospitality were the only sectors reporting billings increases in June 2012. Government/Institutional and Education sectors continue to report declining billings since March 2012..
Clients in Wait Mode
Asked what they foresaw as their biggest challenge in the next three months, panelists most often said cautious clients and clients’ concerns about the upcoming national elections. The weak economy continues to be a drag on the industry.
Modest Improvement Likely to Continue
For the short term, panelists do not foresee significant growth, and most are unlikely to add staff in the next three months. Longer range forecasts for the remainder of the year are more positive for housing and employment, and for remodeling; however, nonresidential construction is likely to slow or stagnate. Growth is likely to be steady but moderate at best.