Third Installment in Outlook Research Series Provides Key Economic Insights for the Design Community
(July 2023 – Washington, D.C.) –– The American Society of Interior Designers (ASID)released its 2023 Economic Outlook Report, an analysis of the current state of the economy, including its impact on the interior design industry, profession, and practice. Following the COVID-19 pandemic and a two-month recession at the beginning of 2020, the report highlights economic indicators, shifts, and progression as they apply to interior design.
“Designers embody resilience and agility,” said Khoi Vo, chief executive officer, ASID. “This body of work examines the economic recovery following the pandemic and highlights designers’ abilities to adapt and excel. ASID is proud to equip the design community with tools needed to inform and improve their practice through the Outlook series of research, and this report, which reflects extensive, dedicated work from the ASID research team, provides us with insights that allow practitioners in all sectors to anticipate and prepare for future economic shifts and trends.”
The third installment of the three-part Outlook research report series, the Economic Outlook, is compiled by ASID to provide interior designers key economic data and predictions to navigate their business and the industry through the year. The report looks at how the economy has changed over the course of the years during and following the pandemic.
Key insights from the report explore the economic impact on employment, trade, recession, hospitality, the workplace and more:
- The report forecasts the economy going in one of two paths: a soft landing or deep recession. There is a reasonable, though small probability of a soft landing. Designers should watch carefully to see if supply chain issues reemerge, oil prices rise sharply, bank failures become more widespread, federal spending experiences a major reduction, or taxes increase sharply.
- National employment has bounced back from its initial sharp decline in early 2020 and is now above its pre-pandemic peak. Employment has continued to rise every month since June 2022, but high-interest rates and a likely recession this year will mean downward pressure on interior design services employment in 2023 and into 2024.
- The pandemic disrupted trade on multiple fronts, leading to many of the supply chain issues. Now, most supply chains have returned to normal. The backlog in shipping has largely disappeared, and the costs for both shipping containers and ships to transport them have fallen sharply from the stratospheric heights during the pandemic.
- Residential construction felt the effects of the fallout from the pandemic but quickly recovered. Construction on single-family housing fell sharply in the first half of 2020 due to the pandemic, but just as quickly, single-family construction activity surged in the second half of 2020, exceeding pre-pandemic levels. Those new housing starts largely held steady in the first quarter of 2022, then began a decline as the Federal Reserve began raising interest rates to combat inflation.
- The COVID-19 pandemic had a huge impact on the collapse of the travel industry. As a result, construction spending on lodging tumbled and finally, after it bottomed in 2021, rose throughout 2022. With a partial rebound in leisure travel that benefitted the hospitality/lodging industry, this year, lodging construction spending is expected to surge up 22%.
- In general, most major cities have excess office space in their downtown areas, though vacancy rates have fallen somewhat as some workers return to the office. Newly constructed offices include amenities such as gyms, eateries, drug stores, and other retail options.
More insights from the report include information on the economy’s effect on retail, senior housing, single and multi-family construction, and monetary policy predictions for 2023 and beyond. The full report can be accessed on the ASID website. ASID’s Outlook series of research reports is sponsored by Sherwin Williams.
The American Society of Interior Designers believes that design impacts lives. Through its programs, networks, and advocacy, ASID serves all those who are a part of the interior design profession and practice. ASID thrives on the strength of cross-functional and interdisciplinary relationships among designers of all specialties, including workplace, healthcare, retail and hospitality, education, institutional, and residential. As a leader in shared conversations around topics that matter in design, from evidence-based and human-centric design to social responsibility, well-being, and sustainability, ASID showcases the impact of design on the human experience and the value interior designers provide.
ASID will mark its 50th anniversary in 2025. Celebrating 50 years of industry leadership, ASID is committed to broadening the impact for the future of design in all of the places we work, play, and heal. Learn more at asid.org.