The American Society of Interior Designers (ASID) Interior Design Billings Index reported that the first quarter of 2013 ended on a high note, jumping six points to 61.0 from the quarter ending in December 2012. Inquiries also rebounded, rising to 64.7 from 63.3 in February and 64.2 in January.
By comparison, the AIA Billings Index lost ground in March, dropping to 51.9, although it remained in positive territory, capping a positive quarter for the architecture industry as well.
Performance Averages Across Industry Sectors
Residential (single family and multihousing): 53.5 (vs. 51 for Q4 of 2012)
Commercial (retail, entertainment, office, hospitality): 49 (vs. 47.5 for Q4 of 2012)
Institutional (healthcare, government/institutional, education): 44.9 (vs. 46.2 for Q4 of 2012)
Improvement in Regional Economic Growth
All areas of the country reported gains in March, led by the Midwest, which posted an index score of 61.7, up over 10 points from February. Business performance in the West continued to improve after several months of weak postings, up over seven points from February to reach 59.5. The South continued to improve gradually, posting a more modest gain of 2.8 points, at 63.7, compared to 60.9 in February. The Northeast, which along with the Midwest has struggled through recovery, sustained another month of positive performance, at 56.5, making up for a decline in February, when it dipped to 51.7.
Smaller firms, either sole practitioners or those with five or fewer employees, reported improved performance in March, up 7 points and 5.9 points, respectively. Mid-size and large firms, however, experienced a decline in billings, a negative 10.8 and 8.3, respectively, perhaps due to the slowdown in some commercial and institutional sectors.
Year-over-Year Performance Shows Similarities
Index figures do not reflect seasonal adjustments, which may also account for some of the fluctuations and sharp declines within various sectors of the industry. A comparison of the six-month periods from October to March of 2011 - 2012 and 2012-2013 reveals similar upswings and downturns in industry performance month-to-month. Notably, the peaks and valleys are sharper in 2012 - 2013 than in 2011 - 2012, which may reflect the volatility in consumer and investor confidence resulting from the 2012 national elections, gridlock in Washington and mixed economic news both at home and abroad.
Long-term Outlook Optimistic but Cautious
In March, the ASID Business Outlook score was 74.0, the same as in February but up from the prior quarter's index of 66.7. When asked about recent hiring, 11 percent of responding panelists hired at least one new employee in the past three months, and 10 percent indicated they would hire in the next three months. Most of these recent and anticipated hirings were among sole practitioners and small firms. Despite some gains in consumer confidence and employment figures, designers by and large remain cautious and concerned about their prospects for 2013. At present, opportunities appear to be most plentiful for residential designers, buoyed by the resurgence in the housing market.