In the fitness world, they call it a plateau. You’ve made solid gains for a while, but despite doing things right your progress just halts. That’s what it feels like reviewing the latest Rising Giants business data, Interior Design’s ranking of the second 100 largest firms. Key findings include:
- Overall fees rose 4% to $475 million, down from the $506 million forecasted
- Big fee increases for office (+37%) and health care (+58%), but decreases for hospitality (-25%) and retail (-30%)
- U.S. dominates, with only 8% of firms taking foreign work, the lowest in a decade
- Staff is up about 3%, while salaries have remained steady
- Total projects completed was steady at 15,000 and is expected to stay so
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Total fees for the Rising Giants ticked up 4 percent to $475 million, but this is lower than the forecast of $506 million. Still, they predict fees of $530 million in the next go around.
Some sectors had big increases, with fees from corporate office projects rising 37 percent; health care rising 58 percent; and education rising 20 percent. (Fees from government projects nearly tripled, and is expected to rise another 15 percent.) Others had large drops, including retail by 30 percent and hospitality by 25 percent.
Reversing a few years of decline, green-related fees have increased to $104 million and are now 28 percent of all fees. Forty-five percent of all products installed were green, totaling $5.3 billion and is the highest since records have been kept.
Rising Giants have installed $12.6 billion in furniture-fixtures and construction products, up 14 percent, and forecast $14.2 billion next time. They also reported completing 271 million square feet and predict slightly more, 276 million. Fees came in at $89 per square foot, hitting the middle of the $85-$98 per square foot range established in the past nine surveys.
The Rising Giants are increasingly sticking to the U.S., with 98 of the 100 firms betting on domestic growth, especially in the South and West. Only 8 percent of firms took on foreign work, the lowest number in a decade. It’s also worth noting that work in every non-U.S. region declined. Still, 46 percent of Rising Giants see growth in International work in the near future, with a focus on China and the Caribbean.
Six of the top ten Rising Giants didn’t make the 2016 list, including the top spot. Of the ten, three have less than 20 interior design staff and this includes New York-based FXFOWLE Architects, the number one Rising Giant with $8,250,000 in fees and 16 interior design staff. Totally new to the Rising Giants list are 12 firms, with two in the top ten: Alliance Architecture (9) and Karn Charuhas Chapman & Twohey (10).
The second installment of the two-part annular business survey of Interior Design Giants comprises the 100 largest firms ranked by interior design fees for the 12-month period ending December 31, 2016. The first 100 Giants firm ranking was published in January. Interior design fees include those attributed to:
- All types of interiors work, including commercial and residential.
- All aspects of a firm's interior design practice, from strategic planning and programming to design and project management.
- Fees paid to a firm for work performed by employees and independent contractors who are "full-time staff equivalent".
Interior design fees do not include revenues paid to a firm and remitted to subcontractors who are not considered full-time staff equivalent. For example, certain firms attract work that is subcontracted to a local firm. The originating firm may collect all the fees and retain a management or generation fee, paying the remainder to the performing firm. The amounts paid to the latter are not included in fees of the collecting firm when determining its ranking. Ties are broken by the dollar value of products installed. Where applicable, all percentages are based on responding Giants, not their total number. The data was compiled and analyzed by the Interior Design market research staff in New York, led by Wing Leung, research director.