Market brightens for interior designers
Written By: admin Created Date: 2017-08-15 Hits: 78 Comments: 0
After a rather tepid beginning to the year, interior design activity jumped in late spring. Although designers of late have not enjoyed the same surge in demand as have remodelers, residential activity — particularly in the single-family home sector — has increased in recent months.
Several industry indicators show designers experienced a notable rise in project requests and inquiries in May, and they expect demand to continue in the coming months.
The most recent Interior Design Billings Index report from the American Society of Interior Designers, for May 2017, states billings jumped 6.5 points in May, following a downturn in April, to a reading of 65.1 — its highest point since May 2014. In addition, the inquiries index rose to 65.7, up two points from April, and the six-month outlook registered 68 after hitting a low of 59 in April.
All in all, the report finds, firms experienced healthy growth and have a positive and healthy outlook for the foreseeable future.
Design firm finance and management consultancy Designer Advantage reports its data shows interior design firms' revenues were up 6.3 percent on average in May compared to the same time last year. That was a substantial increase from the first four months of the year, according to Designer Advantage, which found revenues from January to April were down 4.9 percent from the same period in 2016.
The sluggish start dragged down revenues to date, which at the end of May were 2.11 percent below where they were in May 2016.
Houzz, in its Q2 2017 Renovation Barometer, found strong designer confidence in their future prospects. The outlook for quarter-over-quarter market gains bounced from a reading of 68 in the second quarter to an anticipated 73 for the third quarter. Confidence was strong across all areas of the country, with designers reporting they anticipated increases in the number of inquiries, new orders and requests for larger projects.
A similar pattern can be seen in the American Institute of Architects Home Design Trends Survey for the first quarter of 2017. The billings index for residential firms was at 63 and the index for new projects at 71, nearing a two-year high, according to the AIA.
"Those factors, along with a sizable jump in demand with first-time home buyers is a signal the custom residential housing market will be stable for the foreseeable future," stated AIA chief economist Kermit Baker. Activity was especially strong in remodeling and alterations, including kitchen and bath remodeling.
In reporting their findings, these organizations did not indicate which factors might account for the sudden boost in activity. However, it would appear that rising home prices and the coinciding increase in home equity for many owners, which also spiked in May, has been a boon to designers.
Requests for home equity loans are up as homeowners choose to update and remodel their current home rather than take on the expense of buying another home. With housing inventories near record lows and prices continuing to rise, designers can anticipate demand will continue, with the usual seasonal ups and downs.