III. Industry Analysis
The Interior Design industry has been supported by periods of growth in residential construction and nonresidential construction. The largest market for the Interior Design industry consists of individuals seeking residential design services. Therefore, growth in housing starts, existing home sales and other residential construction projects generally helps drive revenue growth. As a result, years in which residential construction has grown have been beneficial to the industry.
Per capita disposable income and the number of households earning more than $100K have also played a determining role, since industry services are highly discretionary. Periods of higher consumer confidence, per capita disposable income and corporate profit further drive demand since industry services are generally considered a discretionary spending item.
Over the next five years, the Interior Design industry is forecasted to grow. A return to growth in corporate profit and in the value of nonresidential construction are expected to propel the industry moving forward. In addition, an expected surge in residential construction and growth in consumer confidence and disposable income will drive demand for industry services. An increase in the number of households earning $100K in annual income could pose a potential opportunity for the industry as well. These households are much more likely to spend their income on discretionary or luxury services, such as interior design.