Within the past several years, multiple economic forces have battered the interior design industry, reshaping entire sectors and regions of the country. The burst of the housing bubble, ensuing loss of home value, decline in homeownership and near-halt in new construction, combined with a dip in household wealth due to increased unemployment and the devaluation of assets in investment and retirement portfolios, placed a severe damper on the residential design sector. This has left many designers scrambling for small remodeling projects to keep their businesses afloat.
Corporate belt-tightening and a scarcity of affordable financing brought to a standstill many new projects in the contract sector, particularly in office and hospitality design. Faced with whopping deficits and falling tax revenues, government agencies at all levels were forced to cut funding for public projects, including schools and healthcare facilities.
All of this upheaval, along with ongoing uncertainty about when or whether the economy at home and abroad may achieve sustained recovery, has taken its toll on an industry which, even in the best of times, is considered a luxury by most clients.
As reported last fall by the American Society of Interior Designers in its 2012 State of the Industry Report, according to the U.S. Bureau of Labor Statistics (BLS), between May 2008 and May 2010, the number of employed interior designers dropped by 13,170 — a 25 percent decrease. That was the lowest employment figure for interior designers since 2002 and represented a complete contraction of the industry from the “design boom” era that occurred between 2005 and 2008.
Last year, the BLS reported that as of May 2011, employment among interior designers had increased by 830 jobs, or 2 percent, over May 2010. The most recent BLS data report a slight decrease in the number of employed interior designers as of May 2012, to 40,750, or 200 fewer than in May 2011.
Digging deeper into the BLS data, one discovers a more complex shift in the industry than might appear from the topline data alone. Although the total number of employed interior designers fell slightly from May 2011 to May 2012, the number of interior designers employed by specialized design firms actually increased by 290 employees, from 15,640 in 2011 to 16,250 in 2012.
At the same time, the number of interior designers employed by architecture and engineering firms decreased slightly, from 8,710 in 2011 to 8,650 in 2012. Decreases were reported also in furniture (3,380 in 2011 vs. 3,160 in 2012) and in building materials suppliers (2,190 in 2011 vs. 1,880 in 2012) — areas that had reported increases in employees between 2010 and 2011.
These numbers suggest some interior designers who were forced to take jobs in related industries post-recession because of the downsizing of the interior design industry are now finding opportunities within firms that are beginning to hire again — mainly due to the recovery of the housing market.
Regionally, the more sluggish recovery in the Northeast and Midwest, especially in the contract sector, has worn down a number of once more robust firms. States showing the highest percentage of decrease in employment from 2011 to 2012 include Rhode Island (-31 percent), Nevada (-26 percent), Kentucky (-25 percent), Pennsylvania (-24 percent), Utah (-24 percent), Hawaii (-23 percent), Minnesota (-20 percent), South Dakota (-20 percent) and Nebraska (-20 percent). Illinois and Indiana each lost 13 percent. New York continued to lose designers; after dropping 9 percent last year from 2010, it lost another 4 percent in 2012, for a total decrease of 300 designers since 2010.
By the same token, the South and West, which have experienced both economic and demographic growth in recent years, reported increases in employment. California enjoyed a 9 percent increase, bringing its total number of employed designers to 6,540, the highest in the nation. Oregon bounced back from a sharp decline, gaining 170 employed designers, for a 36 percent increase over 2011. Georgia added 210 employed designers, a 13 percent increase.
Texas and Florida had relatively modest gains but helped to make up for previous losses due to the recession. Notably, North Dakota, which has experienced rapid growth in the past two years, picked up 20 designers, for a 25 percent increase, perhaps attracting some designers from South Dakota, where prospects are not as good at the moment.
While it certainly is not news that as the economy goes so goes the interior design industry, these numbers help to explain the diversity of views within the industry as to whether business is or is not improving. Depending on the type of practice and location of the firm, things may be looking up or getting gloomier. In either case, the relatively rapid, substantial improvement in some areas and sectors of the industry should give designers confidence that brighter days lay ahead for their practice and their profession.
Michael J. Berens is a freelance researcher and writer with more than 30 years of experience in association communication and management.