Lighting Design Firms Report Downturn
A recent survey published by the International Association of Lighting Designers (IALD) reveals the COVID-19 impact on lighting design firms.
Lighting design firms are experiencing new challenges as the economy continues to react to the COVID-19 pandemic’s global reach. Firms have experienced a variety of effects from this pandemic based upon size, geographic location, and distribution of work across different sectors.
The International Association of Lighting Designers (IALD) surveyed lighting design business owners and principals about how they have been impacted so far by the COVID-19 crisis. A total of 192 qualified lighting design owners or principals responded to the survey and represented 40 different countries. Their lighting design firm sizes ranged from solo practitioner (32%); two to five employees (28%), six to ten employees (20%), 11 to 49 employees (17%); and 50+ employees (3%). The survey opened on 22 April and closed on 4 May 2020.
Most Lighting Design Firms Were Not Prepared for this Crisis
Much like many businesses around the world, lighting design firms were not fully prepared for this crisis. Over half of the respondents did not have a business continuity plan in place when the COVID-19 pandemic affected cities and countries around the world. Almost 30% of respondents had an outlined plan and 16% had a thorough plan they were following. Many firms are not prepared for recovery planning either—42% of firms do not have a recovery plan. Half of firms have outlined a plan, and only 7% have a thorough plan for recovery.
The majority of firm owners and principals have already tried to access government-based business support (61%), but many have not (29%). Only 10% reported that it was not applicable to them or their government did not offer any support measures.
The impact of this crisis is still uncertain. A smaller number of lighting design firm owners and principals are more optimistic and expect recovery to happen more quickly with recovery in less than six months (20%) and those who believe it will take seven to 12 months (26%). Most firm owners (54%) anticipate it will take much longer—between one to three or more years—before businesses return to pre-COVID-19 levels.
Lighting Design Firms Have Felt Immediate Impact from the Crisis
Lighting design firms across the world are experiencing a range of effects on their prospective work. While only a small portion of owners and principals (8%) have not experienced anything to date, a third of owners and principals have experienced a minor decrease in prospective work. Most firms (59%), however, have experienced a moderate to major decrease in prospective projects.
Over half the firms expect to see a decrease in both proposals and signed contracts in the months of May and June 2020. Furthermore, lighting design firms are bracing for moderate revenue losses in April and incrementally more losses for May and June.
Most Current Projects Continue to Move Forward Despite COVID-19
Most current projects (68%) are moving ahead although 58% are experiencing some delays. Slightly more than 1/3 of firms have experienced many of their projects moving more slowly or having all projects stop entirely.
Owners or principals, however, are facing many project issues because of COVID-19:
- 77% have seen in an increase in project delays/projects placed on hold
- 66% have experienced stalled/stopped construction on active projects
- 51% have had difficulties in getting lighting equipment or dealing with supply chain issues
- 47% have had problems collecting payments
- 27% of firms have seen issues on getting projects financed
- 6% have experienced abnormally increased pricing
Business Owners Juggling COVID-19 Impact on Finances and Staff While Continuing Their Normal Responsibilities
Many lighting design firms were setup well for working remotely before the COVID-19 crisis. 20% of firms did not have to change anything because their staff were already working remotely. 70% of firms have all their staff now working remotely. Only 10% have either some staff or no staff working remotely.
Business owners and principals are spending more of their time doing both existing work and new work based on COVID-29:
- 66% spend time managing current projects
- 44% of owners and principals are seeking new work
- 41% are looking into financial implications and resources
- 40% are managing staff and maintaining morale
- 38% are speaking with clients
- 16% are interacting with suppliers
- 14% are setting up virtual offices
To conserve cash, firm owners and principals have put a freeze on any major expenditures (71%); frozen discretionary spending (education and travel) (60%); and placed a hold on new hiring (46%). Only 10% have reduced staff benefits to date.
Lighting Designers Are Concerned About the Impact of COVID-19 to the Profession
While it is too early to forecast future impact, lighting design firm owners and principals expressed both concern and optimism about COVID-19’s impact on the profession of lighting design. Some of these viewpoints have been voiced prior to the pandemic, and now have potentially been exacerbated by it. Some think this is an opportunity to continue to adapt and grow.
Many lighting design firm owners and principals expressed increased concern about the profession given that lighting designers may not be considered ‘essential’ to a project team like an architect or engineer. If not considered essential, lighting design services may be considered a luxury and may be value-engineered out of projects and handled by electrical engineering firms or lighting manufacturers.
Other firm owners and principals believe that this crisis is an opportunity to think about the essential work of lighting designers. There is an overarching understanding that the building and construction industry, and all its collaborators, will need to adapt and change to this new economy. Many cited that COVID-19 will change how we live and our workspaces, providing new opportunities for lighting designers who will have to adapt to the new technical and economic needs of customers. As one firm owner or principal stated, “The role of lighting designers will still be a primordial essential in our constructed habitat."
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