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 13,400 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 million annually.
- The interior design services industry consists of about 13,400 companies that employ about 45,000 workers and generate $13.6 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
Feb 22, 2023 - Existing Home Sales Continue to Decline
- Sales of existing US homes, a demand driver for interior design services, fell 0.7% in January from December and were down 36.9% year over year, according to the National Association of Realtors (NAR). January marked the twelfth consecutive monthly drop as rising interest rates slow home sales. NAR chief economist Lawrence Yun said, “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.” Yun added, “Inventory remains low, but buyers are beginning to have better negotiating power. Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
- Some of the most-followed décor tastemakers and influencers on TikTok and YouTube have identified several current design trends that are best avoided, according to Architectural Digest. So-called “fast furniture” is falling out of favor due to its lack of sustainability. Instead, some designers suggest older pieces that stand the test of time. “Maximalist” design was in response to Scandinavian-inspired minimalism, which was embraced by many millennials, but some influencers note that flooding spaces with more furniture and other objects quickly devolves into clutter. Designers increasingly avoid the monochrome trend, especially in lighter white and grey tones. Pattern, saturation, and warmer tones are better alternatives. Other trends that are on the outs with influencers include painting wood furniture, wallpaper murals, bulbous furniture that elevates design over comfort, and inexpensive reproductions of iconic pieces.
- Rising costs of borrowing are showing signs of slowing the boom in home improvement spending that began in the early days of the pandemic, according to The Wall Street Journal. While home values have moderated somewhat, homeowner equity is near all-time highs. However, sharply higher interest rates make borrowing against that equity through cash-out refinancings more expensive. Volatility in the stock market and inflation also tend to make consumers feel less well-off and make them more hesitant to tackle costly renovations.
- As rising home prices and interest rates have made housing less affordable, some renters are renovating despite no chance of recouping their investment, according to The Wall Street Journal. As renters pause their homebuying plans, some are doing DIY projects to make their spaces more livable. Some renters are working out deals with landlords to either get them to contribute to remodeling projects or negotiate rent reductions in exchange for improvements. Interior design firm Havenly has seen its 2022 growth rate outpace 2021, in part driven by a 20% increase in spending by renters.
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