2017 ASID Interior Design Billings Index 1st Quarter Report
The American Society of Interior Designers released the 2017 ASID Interior Design Billings Index 1st Quarter Report during a live webinar on May 16. The data indicates strong economic momentum and sturdy revenue gains for the design industry. A replay of the webinar may be viewed here, and the full report may be downloaded here.
First quarter ASID survey results show positive momentum and the overall trend remains positive.
The March ASID IDBI score is 62.8, a clear advantage over December’s value of 52.9. The March index is stronger than its three-month moving average of 59, indicating strong momentum and signaling sturdy revenue gains (score of 50 or above). The new project inquiry rate rose to 58, up from a December score of 53.3.
Strong demand for interior design services across the four size cohorts.
Design firms of all sizes enjoyed positive billings in March and had scores above their three-month moving average reflecting ongoing business strength. Sole practitioner design firms reported a strong March IDBI score of 60.9, higher than any scores from the previous 12 months. Firms with two to nine employees reported an even stronger score of 63.8.
ASID firms in all regions report growth during the first quarter.
Design firms across all regions showed billing growth relative to low January scores suggesting business conditions strengthened. Scores ranged from 59 in the West to 66 in the Northeast.
Billing results are positive across all market specializations, except the Institutional sector.
Billings for design firms specializing in single-family and multifamily residential sectors have gained since December, posting scores of 63 and 56. Commercial sector interior designers reported no change in billings from February to March. Those serving the Institutional sector reported a decline in billings over the month with a score of 40.
Six-month outlook – stronger business conditions expected.
The ASID six-month interior design business conditions index, the Conference Board’s expectations index and the Dodge Momentum Index reflect an improving broader economy and that spending for design services should continue over the next six months. Looking forward, the design industry remains optimistic about the near term outlook for business conditions. The six-month business conditions index score of 63.4 for March was virtually unchanged from the December score of 63.6 and markedly higher than September (59) and June (57) scores.
The labor market continues to expand.
U.S. payroll employment rose 98,000 in March and averaged 163,000 in the last six months. In 2015 the average monthly gain was 226,000 jobs and in 2016 it shifted to 187,000. Since 2014, annual monthly job gains have slowed as the unemployment rate has approached full employment. Average hourly earnings in March increased by 0.2 percent bringing the year-over-year gain to 2.7 percent. Architectural and interior design services job growth continues with monthly net gains in jobs for both professions since spring 2016.
Construction spending showing strong gains in early 2017.
U.S. construction spending in February rose to a decade high spurred by strong gains in residential construction spending. Total construction spending for February was $1.93 trillion, 0.8 percent higher than in January and 3 percent higher than in February 2016.
According to Jack Kleinhenz, ASID economist:
Recent data indicate the economy cooled a bit more than expected in the first quarter. No single factor dominated this year’s slower start. While recent consumer and business spending are at odds with elevated confidence measures, we expect a pick-up in spending in the coming months and ASID indicators point in this direction.