The American Society of Interior Designers (ASID) recently shared the top trends from its upcoming 2024 Economic Outlook Report, an analysis of the current state of the economy, including its impact on interior design business. The report highlights economic indicators, shifts, and progression as they apply to interior design.
“ASID’s economic research empowers all members of the design community as they navigate the current landscape of their business,” said Khoi Vo, chief executive officer, ASID. “ASID serves designers, educators, researchers, firms, manufacturers, sales consultants, and more, and we are proud to consistently provide the necessary tools to prepare members for shifts and trends in the economy. This research by the ASID research team provides designers with insight on the influence of the economy across all sectors of the design profession and the greater industry of the built environment.”
The 2024 Economic Outlook Report is compiled by ASID to provide interior designers key economic data and predictions to navigate their business and the industry through the year. The report looks at how the economy has changed over the course of the year and what changes are expected for the year ahead.
Key insights from the report explore the economic impact on employment, trade, recession, hospitality, the workplace and more:
- Competition to secure and retain talent has driven wages and salaries higher, however rising labor costs could contribute to higher inflation. Labor cost increases have been decreasing, and the outlook for 2024/2025 is for sustained employment growth.
- Inflation has moderated but remains above the Federal Reserve (The Fed)’s goal of 2%. The Fed has said they expect to keep interest rates at their current level until the inflation rate has fallen to 2% and is likely to remain steady at that rate. Meanwhile, analysts expect the Fed will make one rate in 2024. Should the inflation rate spike or appear resistant to further decline, the Fed would undertake at least one more rate hike of 0.25% - though this is unlikely.
- State and federal government money for renovating and upgrading existing educational facilities as well as building new facilities is now flowing more freely. Education construction spending will increase healthily in 2024 and climb at a solid but slower rate in 2025.
- Spending on lodging construction began to rise, surging in 2023, as travel rebounded over 2022 and 2023. With much of the needed work done and facing high interest rates and high construction costs, lodging construction spending will be down in 2024, but will increase a modest amount in 2025.
- Spending in residential improvements was robust between 2020-2022 as remote work and childcare issues fueled demand for home additions and renovations during and after the pandemic. With many of those improvements now complete, coupled with high interest rates and construction costs, the demand for improvements is falling—resulting in lower spending on residential improvements in 2024 and 2025.
- High and rising vacancy rates in office spaces have forced property owners to lower office rents. With lower rents and higher vacancy rates, property owners have faced revenue losses, raising the possibility they will default on their mortgage loans. Numerous defaults could in turn lead to bank failures, posing a threat to the overall economy. Office construction spending will be up slightly in 2024 and 2025, with most of the spending directed toward renovating existing office space to compete in a tough market.
More top highlights include insights on the economy’s effect on retail, senior housing, single and multi-family construction, and monetary policy predictions for 2024 and beyond. Access the top highlights here, and the full report will be made available later this month on the research section of the ASID website. ASID’s Outlook series of research reports is sponsored by Sherwin Williams.
