The American Society of Interior Designers (ASID) recently 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. The report highlights economic indicators, shifts, and progression as they apply to interior design.
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. Key insights from the report explore the economic impact on employment, trade, recession, hospitality, the workplace, and more:
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. 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 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.
The report forecasts the economy going in one of two paths: a soft landing or deep recession. The reemergence of supply chain issues, the sharp increase of oil prices, widespread bank failures, and federal spending are indicators of a possible recession that professionals should look out for in the coming years. There is a reasonable, though small probability of a soft landing.
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.
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.