The ASID Interior Design Billings Index remained in positive territory for the month of February but showed no improvement over the previous month. Billings for February posted at 55.1, just slightly below the January index of 55.3. (Any number over 50 is considered positive.) Inquiries also were down, dropping nearly a point to 63.3, compared to 64.2 in January.
Similarly, the AIA Billings Index improved slightly in February, at 54.9 compared to 54.1 in January, which was the strongest growth in billings at architecture firms since the downturn began in early 2008, according to the AIA. The AIA inquiries index rose to 64.8 for the month, again the strongest reading since the design recession began.
Performance Mixed Across Industry Sectors
Although overall performance was about the same, many sectors experienced improved billings in February. Gains were registered across the industry, in commercial and institutional sectors as well as residential. The AIA also reported that each of the major building sectors served by architecture firms saw growth in design activity in February.
Multihousing, which had declined to 40 in January from 49 in December, reported a15-point jump, returning to positive territory at 55, its highest level since January 2012. Single family residential also continued to regain ground, reaching 59 in February, following a 5-point increase in January (from 51 to 56).
Commercial sector performance was mixed, with modest increases in hospitality and entertainment but declines in office and retail. Hospitality continued to improve, returning to positive territory at 52, the same level as in fall of 2012. Entertainment also nosed into positive territory at 50, after two months of negative scores. Retail, which enjoyed a 17-point jump in January to 58, posted a near 20-point decline in February, dropping to 38.9 — although that fluctuation may reflect the overall low representation of retail within the Index panel. Office reported a 4-point drop, dipping just below positive territory to 49.
Both healthcare and government/institutional reported substantial gains for the month of February. Government, which had floundered through the second half of 2012, posted an index of 64 — up 17 points from January and its highest posting since the Index began tracking in November 2010. Healthcare reported a 10-point gain, moving further into positive territory at 60, its highest point since December 2010. It is too early yet to determine if these are seasonal fluctuations or an indication that these sectors may be on the path to recovery. Education, in contrast, continued its slump, dropping a point to 38; it has not posted in positive territory since January 2012.
Regional Economies Driving Growth
Billings improved, albeit modestly, in those areas of the country experiencing overall economic and demographic growth, while other regions continue to struggle through recovery. After a two-month decline into negative territory, the West rebounded in February, reaching 52.4, its first positive reading since November 2012. The South posted only a slight gain, at 60.9 compared to 60.4 in January. Both the Northeast and Midwest, which had experienced gains in January, lost ground but remained in positive territory, at 51.7 (from 60.3) and 51.5 (from 53.1), respectively.
Among those panelists who reported increased billings in February, the majority (60%) said billings increased only between 5 and 10 percent. Among those that reported a decrease in billings, half said billings decreased between 5 and 20 percent.
Long-term Outlook More Optimistic
An increase in consumer spending and consumer confidence gave designers a lift in February. The ASID “confidence” index rose to 74 in February from 66.4 in January, indicating that more designers anticipate business will improve in the months ahead. Nonetheless, designers remain cautious and concerned about their prospects for 2013, noting that the gridlock in Washington over the federal budget and uncertainty about whether the global and national economies will continue to improve, remain critical factors as to whether clients are able or willing to undertake new projects.
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 here.