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Interior Design Reveals the 2023 Rising Giants

The 2023 'Rising Giants' report from Interior Design magazine highlights the impressive growth and trends among the second tier of the largest design firms. In 2022, these firms collectively achieved total fees of $532 million, marking a substantial 50% increase from 2021 and surpassing pre-pandemic levels. This growth indicates a robust recovery and expansion within the interior design industry. The report categorizes these firms based on various metrics, including design fees, project values, square footage, and staffing. Hospitality projects emerged as the primary revenue driver for these Rising Giants, contributing 30% ($162 million) of their overall fees. This sector, while still dominant, saw a slight decrease from 38% two years prior. Corporate projects followed, accounting for 25% ($131 million), with residential projects at 17% ($89 million) and healthcare at 9% ($46 million). Projections for 2023 suggest stability in hospitality's contribution, a slight decline in corporate work, and an increase in residential projects. The furnishings, fixtures, and construction (FF&C) market experienced a significant boom, more than doubling to $35.8 billion, largely influenced by a single firm's substantial contributions, and is forecast to reach $38 billion in the coming year. The volume of projects undertaken by these firms saw a notable increase, with nearly 23,000 projects completed in 2022, up from 15,000 in 2021 and almost double the 12,000 projects in 2019. However, total square footage, at 188 million, did not keep pace with this project growth, suggesting a shift towards smaller-scale projects, diversification into consulting and branding, and the impact of hybrid work models on spatial requirements. Staffing levels also saw significant expansion, with design staff increasing by 62% to approximately 4,200 in 2022, and the total employee count rising by 27%. This influx of talent has led to an increase in salaries, with average designer salaries reaching $80,000, the highest recorded in the tracked data. The biggest challenges identified by these firms include recruiting and retaining qualified staff (89%), training staff (43%), and retaining existing staff (40%). Other concerns include creating new business opportunities (31%), recruiting diverse staff (28%), and offering appropriate pay and benefits (28%). Client-related issues highlight the difficulty in getting clients to understand design value (52.1%) and their willingness to pay what it's worth (66%). Economic uncertainties (62%) and earning appropriate fees (66%) are also significant business challenges. Despite these hurdles, the Rising Giants forecast a healthy 10% increase in total fees for 2023, reaching $583 billion, indicating continued confidence in the sector's growth trajectory. #InteriorDesign #RisingGiants #DesignIndustry #MarketTrends #HospitalityDesign #CorporateDesign #ResidentialDesign #StaffingChallenges #EconomicForecast #InteriorDesign #RisingGiants #DesignIndustry #MarketTrends #HospitalityDesign #CorporateDesign #ResidentialDesign #StaffingChallenges #EconomicForecast
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