Mix Masters

It's hard to tell what brings on more fatigue, the economy or the media reports on it. With so much static, can we tell if we're better off than before? Or worse? In a word: Yes. The 2010 trends for the firms on Interior Design's top 100 Giants list were a classic mixed bag. At the bottom of that bag, however, there could be a prize. Read on.

Design fees remained flat at $2.2 billion, but total square footage exploded 22 percent, to 677 million. This cuts to the heart of the biggest challenge the Giants face: convincing clients to pay an appropriate price for work. Everyone loves a bargain, and tight times give more confidence to those with dollars to spend. As a result, the 2011 fee forecast inched down to $2.1 billion-although it's worth noting that the Giants beat their pre- vious forecast by $190 million.

Fees naturally affect employment. The good news: Interior design staff numbers rose 7 percent, and total employees popped 65 percent, from 79,000 to 130,000. The bad: Salaries fell an average of 5 percent. Those extra hires could also explain why the aver- age designer generated $216,000 last year, off almost 6 percent. The hiring trend should continue, though, as the Giants expect to take on a median of five additional design- ers in 2011. HBA/Hirsch Bedner Associates, the number-six firm, plans to hire 100 de- sign staffers, due to foreign expansion.

Therein lies another theme: Go where the work is. Revenue from outside the U.S. has more than doubled since 2005. Back then, firms made less than 10 percent of their cash overseas. It's now over 21 percent, thanks mostly to emerging markets continuing to emerge. China is by far the country with the most predicted growth-no real surprise there-and 73 of the Giants booked work in Asia and the Pacific Rim last year. Although the number doing business in the Middle East dropped 15 percent, it remains a good source of business for nearly half the Giants. Making a comeback of sorts could be the RNL designed a facility for the U.S. Department of Energy's National Renewable Energy Laboratory in Golden, Colorado. United Arab Emirates, 47 of the Giants say.

Growth may also come closer to home. The Giants see the most potential in the U.S. South and Northeast, but don't over- look Canada. Compared to the previous year, 10 percent more firms did work there.

Now that we know where the work is, what categories does it fall into? Offices, up 7 percent, and hospitality, up 11, remain rainmakers, while health care and assisted living dropped 21 percent. But the real story is residential work, which rose a whopping 47 percent. The ratio of new construction to renovation remained unchanged at 57-to-43, but urban residences rose 9 percent, and suburban projects jumped-wait for it-63 percent. Though we shouldn't declare vic- tory over the housing crisis yet, some folks have clearly found a little extra cash. If there can be such a thing as a perma- nent trend, it has to be sustainability. The number of firms that said yes, when asked if "green" is one of their disciplines, hit 92. Nearly 40 cents of every dollar earned comes from sustainable design. Square footage has risen 46 percent in two years, and 85 of the Giants report that project volume either grew or stayed the same. To paraphrase an over- used movie line, green is good.
 A mixed bag indeed. And the prize at the bottom looks like. . .a coin. Last January, com- ing off the worst of these particular times, 71 of the Giant reported a decline in fees. Now "only" 49 do. That's a legit comeback, and there's still more to savor if you break down the growth. For the 2010 Giants re- porting the greatest growth in fees, that was 7 to 33 percent. This time? Between 30 and 256 percent. Saving the best for last, 93 of the Giants believe that 2011 will be better for their businesses.