Interior Design Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 14,100 interior design firms in the US plan, design, and administer projects in interior spaces to meet the physical and aesthetic needs of customers. Revenue comes primarily from design services and product sales. Companies may specialize in a particular sector (hospitality, health care, institutional, residential), room (kitchens, bathrooms, closets), or style (contemporary, traditional).
Demand Driven By Construction Trends
Interior design services are often tied to new construction and remodeling projects.
Design Driven By Trends And Fads
The interior design market is often driven by styles and trends in the fashion world.
Industry size & Structure
The average interior design service provider operates out of a single location, employs 3-4 workers, and generates about $1.2 million annually.
- The interior design services industry consists of about 14,100 companies that employ about 53,700 workers and generate $17.1 billion annually.
- The industry is highly fragmented; the top 50 firms account for 15% of industry sales.
- Large companies that offer interior design as part of a portfolio of services include Gensler, HOK, and Perkins+Will. The majority of firms are small, independent companies with localized operations.
Industry Forecast
Interior Design Services Industry Growth
Recent Developments
Apr 26, 2024 - Moderate Industry Sales Growth
- The interior design services industry’s sales are expected to notch more moderate growth over the next several years. The industry’s year-over-year sales rose 13.1% in 2022 before moderating to 5.5% growth in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales are projected to rise a modest 2.4% in 2024 and 3.8% in 2025, then see average annual growth of about 4.3% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Home remodeling spending is expected to continue to soften in 2024, but the rate of the slowdown will moderate by the first quarter of 2025, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to decrease by 3.4% to $468 billion in the second quarter of 2024 compared to Q2 2023. In the third quarter of 2024, remodeling spending will drop quarter-over-quarter to $453 billion, down 7.4% from Q3 2023. Spending will then decline to $449 billion in Q4 2024, down 6.6% from Q4 2023. In the first quarter of 2025, year-over-year spending is forecast to drop 2.6% to $451 billion. While the remodeling market is cooling compared to the highs seen during the pandemic, the Joint Center expects improvements will be supported by a stabilizing housing market, improved materials costs, and the rising age of US housing stock.
- The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the first quarter of 2024 was 66, down one point from the fourth quarter of 2023, according to an April 2024 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the first quarter, the Current Conditions Index portion of the RMI remained unchanged in Q4 2023 at 74. The Future Indicators Index component of the RMI was also unchanged at 59. While the RMI remained solidly in positive territory in Q1 2024, the NAHB noted that high prices for labor and materials continue to pose challenges to the remodeling industry. The NAHB said that although the Current Conditions Index and the Future Indicators Index were unchanged in Q1, the overall RMI dropped a point due to rounding.
- Hidden doors and secret rooms are increasingly popular with homeowners seeking to add a hint of mystery or whimsey to their homes, according to The New York Times. Popular projects include bookcases and cabinets that pivot to reveal hidden doorways to a pantry, closet, or wet bar. Website Houzz, which connects homeowners with remodeling specialists, reports that between 2022 and 2023, hidden-feature search terms such as “trap door” and “speakeasy home bar lounge” more than doubled. Remodeling industry observers note the hidden-door trend began during the pandemic when people were stuck at home and looked to maximize the use of existing space. Some homeowners are adding fortified hidden enclosures to serve as panic rooms and emergency preparedness storage.
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