The ASID Interior Design Billings Index moved up slightly in August, reversing a downward trend that began in May. ASID firms reported positive growth in billings, posting an Index score of 53.4, compared to 51.5 in July. The Index has remained in positive territory now for eight consecutive months and for 10 of the past 11 months (with only a slight dip below positive in December). The Inquiry Index for August also rose by nearly 2 points, to 58.8, compared to 57.0 in July.
The Index has not been as strong in the third quarter, which may may reflect seasonal changes. Interior design continued to perform better relative to architecture. The AIA Billings Index for August improved but still fell below positive territory, at 48, a gain of almost 3 points from July.
Residential Improves, Other Sectors Stay Flat
A strong showing in both single family and multihousing projects buoyed billings in August. A rise in inquiries suggests that residential will continue to do well in the fourth quarter. The news was not so good on the contract side. Education experienced a positive jump from 34 in July to 54 in August. But healthcare, government and commercial remained flat or dipped slightly across all sectors–retail, office, hospitality and entertainment. The Dodge Momentum Index, a leading indicator for construction, shows positive signs and suggests designers can expect greater expansion in the months ahead.
Small Firms Post Bigger Gains
Small firms enjoyed the biggest increase, gaining more than 4 points over July. Sole practitioners and large firms remained flat, but medium size firms declined substantially, perhaps due to the weak commercial activity.
Regionally, the South and the Northeast reported the biggest gains, and the West improved slightly. The Midwest, which had posted gains in July, fell to its lowest point since January.
Hesitant Clients Holding Back
When asked which factors had the greatest impact on whether clients were willing to undertake new projects, panelists overwhelming pointed to clients’ “wait and see” attitude. Nearly 8 in 10 panelists cited a decline in consumer confidence as a drag on business, and 6 in 10 mentioned a lack of confidence in the nation’s leadership to take action to improve the economy. More recent positive economic and consumer spending news may improve confidence in the months ahead.