Good news to start 2013 — according to the ASID Interior Design Billings Index, billings were increasingly positive in January. After a seasonal slump in December, the Index moved back into positive territory in the month of January. The Billings Index for January was 55.3, compared to 47.2 for December. (Any number over 50 is considered positive.) Inquiries were up nearly 10 points in January, at 64.2, compared to 54.4 in December, suggesting designers may see business pick up in the first quarter of 2013.
By comparison, the AIA Billings Index also improved in January, to 54.1, following a slight downturn in December (51.2) after strong showings in October and November.
Improvement Across All Sectors
All sectors of the industry — residential, commercial and institutional — reported increased billings for January over December. Within sectors, only multihousing experienced a decline.
Single family residential did not have as strong a rebound as reported in January 2012 (9 points over December 2011) but still gained ground, posting an index of 56, compared to 51 in December. Multihousing, which had enjoyed one of its best months in 2012 in November (54), continued to decline, falling to 40 in January from 49 in December.
The commercial sector saw substantial gains, led by retail, which posted a 17-point jump from December (58 vs. 41), although that fluctuation may reflect the overall low representation of retail within the Index panel. Both office and entertainment were up six points in January (at 53 and 45, respectively). Hospitality also improved, up 3 points, but remained below positive territory for the second month, after a positive showing in October and November.
Government, which had floundered through the second half of 2012, posted an index of 47 — not positive, but up 9 points from December. Both healthcare and education registered small gains, up 3 points and 2 points, respectively. Healthcare returned to positive territory at 50. But education continued its slump at 39; it has not posted in positive territory since last January.
Gains in Most Regions
Billings were positive throughout most of the country, with the exception of the West, which dipped slightly, from 49 in December to 47.7 in January. Both the Northeast and the South posted substantial gains: The Northeast index rose nearly 20 points, from 40.9 in December to 60.3 in January; and the South reported a 12-point gain, from 48.3 to 60.4. The Midwest increased moderately, from 48.7 to 53.1.
Among those panelists who reported increased billings in January, nearly three-quarters (72%) said billings increased between 5% and 20%. Among those that reported a decrease in billings, the largest portion — about a third — said billings decreased between 5% and 10%.
Designers’ Outlook Less Buoyant
Throughout much of last year, designers remained optimistic, even when billings began to weaken in the second half of the year. But a dismal December and concerns about the gridlock in dampened designers’ spirits somewhat. Members of the panel expressed concern about continuing economic uncertainty, whether taxes and the national debt will batter the industry, and if clients are uneasy or unwilling to spend.
When asked what issues were having the greatest impact on their businesses, 47% of panelists said poor sales or billings (with 16% saying the impact was “critical”); 43% said the cost or availability of healthcare (again, 16% saying the impact was “critical’); 39% said taxes; and 29% said delayed payments or lack of cash flow.
Designers were somewhat less concerned about the impact the national elections would have on their business. When asked in November, shortly after the elections, 29% of panelists said they thought the outcome would likely improve their business; 29% said it make things worse for their business; and 42% said it would make no difference. When asked again in January, following the inauguration, again 29% said the business would likely improve, but only 21% said they thought the outcome would have a negative impact on their business, and 50% said it would make no difference.
About the ASID Index
Launched in November 2010, The ASID Interior Design Billings Index tracks performance data for billings, inquiries and product sales specific to the interior design industry. The index is based on a monthly survey of 300 firms and provides a tailored perspective on billings, business conditions and economic outlook. The results are compiled into diffusion indexes centered on 50, with scores above 50 indicating an increase in billings, and scores below 50 indicating a decline. More information on the index can be accessed at www.asid.org/idindex.