Shifting conditions present challenges for designers
Wednesday, August 05, 2020
At the beginning of the third quarter, as many states began to relax restrictions, business appeared to be picking up for interior designers in some sectors and regions of the country. With the recent resurgence in outbreaks of the coronavirus nationwide, however, activity has pulled back somewhat in recent weeks.
In addition, delays in manufacturing and purchasing, along with a shortage of skilled tradespeople, have added to designers’ challenges on top of adapting their practices to ensure the health and safety of their employees and clients.
Continuing its recovery from a record low in April, the American Society of Interior Designers (ASID) Interior Design Billings Index (IDBI) rose nearly 8 points in June, after rebounding more than 25 points in May. The Inquiries index moved into positive territory, at 52.3, for the first time in several months. Gains were reported in all regions of the country.
Similarly, A&D firms responding to the Houzz Q3 2020 Renovation Barometer survey, fielded from June 27 through July 10, reported a modest growth in recent business activity, up 4 points from the first quarter, but anticipated substantial improvement in the third quarter.
The indicator for Expected Business Activity, related to project inquiries and new committed projects, jumped from 35 in the second quarter to 67 for the third quarter. Designers posted a whopping 51-point increase, reflecting a flurry of new prospect interest as optimism that the country was on its way to recovery spread.
That optimism was short-lived, though, as states that had begun to open early experienced a rapid rise in new cases of the virus, triggering a return to stricter containment measures. Between Memorial Day and Independence Day, it was becoming evident that hopes for a quick return to some kind of normalcy were premature, thus delaying the reopening of many sectors of the economy.
A Pulse survey conducted by the National Kitchen & Bath Association (NKBA) at the beginning of July found little change in members’ assessment of the impact of the health crisis on business activity between early June and early July. Designers especially appeared to be struggling a bit more than other member segments, with their impact rating increasing slightly to 6.8, compared to 6.5 in June. Only 37% of designers said demand for their services was increasing, while 25% said demand had decreased from the previous month.
Results from the most recent ASID COVID-19 Pulse Survey, from July 28, show renewed concern about the impact of the health crisis on designers’ businesses, with more designers reporting a medium-high level of concern.
Nearly half of firms participating said they currently were experiencing no notable negative effect on their business, and the overall portion of firms having projects in projects increased from June by nearly 10 percent. But there is concern that conditions could worsen depending on how the health crisis unfolds in the coming months.
Some sectors have fared better during the crisis than others. High-end residential design has enjoyed a fairly quick recovery, with clients stuck at home or buying second homes outside urban areas wanting immediate upgrades and renovations. Multi-residential design in areas where housing is expensive and in short supply has performed well, also. Commercial practices, on the other hand, particularly hospitality and restaurants, retail and office understandably are struggling along with their clients whose businesses are shut or substantially scaled back.
Further complicating matters for designers are shortages and delays of certain products and materials due to factory closings, and a shortage of skilled tradespeople, for whom demand is high for both new and existing construction.
Kitchen and bath designers have seen a shift from large-scale to smaller-scale projects, plus more competition from DIY projects with the re-opening of home improvement stores, since homeowners are stuck at home and have more time on their hands to shop online and do much of the work themselves.
Given the developments of the past couple of weeks, it seems likely that business activity for the third quarter will not meet earlier expectations. But it does look as though the coming months hold more promise than the first half of the year.
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