Interior design unveils the rising giants of 2022

If you think of the pandemic as a roller coaster, then the 2022 trade trend data for the Interior design Rising Giants, the second of the 100 largest companies, would be popular. Like any good coaster, the initial drop was a doozy, with total fees dropping from $521 million in 2019 to $314 million in 2020 as COVID-19 hit the economy. Now, however, it looks like the roller coaster has crossed over and is heading for the next ramp. Total fees for 2021 were $354 million, a healthy 13% increase. And the Rising Giants forecast the coming year at $416 million, continuing to soar.

Rankings 2022

What is more remarkable than the predictions themselves is the certainty of the Rising Giants. Just over half of the companies surveyed are ‘confident’ in next year’s figures, and three in 10 are ‘very confident’. As for those who present themselves as “not confident,” well, that number went down from 31% to 14.

Let’s dig a little deeper into the 2021 results to see just how much confidence is warranted. Hospitality remains the Rising Giants’ largest line of business, accounting for 34% of total fees ($121 million, roughly equal to 2020). Head office work increased 26% to $88 million and accounts for a quarter of all work in this group. Residential is the third biggest silver maker and was up 22% from 2020 to $60 million. Health care now accounts for 10% of all costs and increased by 19% to $36 million.


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Project categories and locations

Here again, the forecasts for the business sectors are all positive, in particular retail (which is expected to grow by 39% in 2022), hotels (23%), residential (19%) as well as healthcare. and businesses (15% each). Furniture and fixtures and building products also posted a robust recovery, rising from $10.2 billion in 2020 to $15.7 billion. It’s not quite the $18.5 billion of 2019, but these giants are planning $17.1 billion for 2022, so the momentum is building.

Measures of workload are also on the rise. Total square footage increased by 10 million, or 6%, to 180 million. The forecast for 2022 is just over 200 million. When it comes to cost per square foot, the coaster starts off with $109/foot in 2019, up to $77, then back up to $118. The total number of jobs has also increased: from 12,039 in 2020 to 15,187, with a forecast of 16,653 in 2022.

Customer issues

Practice issues

business matters

The withdrawal from work outside the United States – as also seen in our other Giants groups – continues here. In 2019, 16% of the Rising Giants did international work. Now that number is only 7%. For those doing this work, Canada and the Asia/Pacific region have seen a sharp drop in the number of companies working there, while the Caribbean has warmed up. As a result, it’s hardly surprising that these giants see the greatest potential for growth in the Southwest, Southeast, and Northwest United States. Only two companies said they planned to close an office in 2022, but a remarkable 10% expansion plan.

Companies with the highest fee growth

1 CetraRuddy Architecture 1,521,680 6,250,000
2 J. Banks Design Group 2,555,362 5,602,531
3 Figure 3 3,748,948 6,220,000
4 design agency 6,136,340 7,560,494
5 Dado Studio 3,000,000 4,398,255
6 Brereton 3,925,365 5,213,704
seven Kamus Keller 3,000,000 4,248,802
8 Arris, a creative studio 4,600,000 5,600,000
9 indidesign 2,200,000 3,200,000
ten StudioSIX5 6,860,000 7,800,000

Design headcount is the only one currently not increasing and has actually gone down from 2,739 in 2019 to 2,593. Billing rates have held steady ($130 per hour), while per-employee fees have declined by 29% since 2019: $200,000 to $143,000 in actual figures. Staff salaries, however, have increased, with designers dropping from $70,000 a year to $75,000. Project Managers remained unchanged at $105,000 per year, while Principles/Partners saw their compensation increase from $155,000 per year to $187,000.

Fees by type of project

1 Hospitality 121 542 243 149 574 694
2 Desk 87,737,260 99 696 554
3 Residential 59,884,038 71,358,676
4 Health care 36,329,517 41,620,977
5 Detail 15,073,568 20,945,710
6 Government 6,249,941 6,868,958
seven Cultural 2,176,224 3,908,544
8 Educative 15,280,034 16,316,609
9 Transportation 322 312 440,656
ten Other 16,449,866 16,371,660

Project numbers by type

1 Desk 4,793 5,160
2 Residential 2,044 2,056
3 Detail 1,902 2,256
4 Hospitality 1,758 2,171
5 Health care 1,704 1,603
6 Education 730 862
seven Government 575 650
8 Cultural 214 398
9 Transportation 202 351
ten Other 1,265 1,146

When it comes to the top challenges affecting business, the refrains are pretty much what you hear everywhere in business: Recruiting and retaining qualified staff. Design firms will always be concerned with earning proper fees and dealing with discerning clients. But here’s a telling data point in the ‘Business Challenges’ survey: Last year, 87% of companies were worried about economic uncertainty; this year, it’s only 55 percent.

And that may be the watchword at the moment: optimism. Forecasts for 2022 – and the Rising Giants’ growing confidence in their business prospects – show that while, of course, we may not be able to shake off this pandemic once and for all just yet, businesses are still doing great and much-requested work while we’re discovering all these other things.

Methodology

The second installment of the two-part annual survey of interior design giants includes the second-largest companies ranked by interior design fees for the 12-month period ending December 31, 2021. The first ranking of the 100 giants was published in February. Interior design fees include those allocated to:

  1. All types of interior work, including commercial and residential.
  2. All aspects of a company’s interior design practice, from strategic planning and programming to design and project management.
  3. Fees paid to a company for work performed by employees and independent contractors who are “full-time equivalent staff”.
    Interior design fees do not include income paid to a business and given to subcontractors that are not considered full-time equivalents. For example, some companies attract work that is subcontracted to a local company. The originating business may collect all fees and retain a management or generation fee, paying the rest to the performing business. The sums paid to the latter are not included in the fees of the collection company when determining its classification. Links are broken by dollar value of installed products. Where applicable, all percentages are based on the Giants who responded, not their total number. The data was compiled and analyzed by Interior Design and ThinkLab, the research division of Sandow Design Group.

Betty K. Park