Specialized design services

The pick-up in economic activity across Canada in 2002 was welcome news in select corners of the specialized design industry group. Industrial design, landscape architecture and other design all posted double-digit rates of revenue growth, while graphic design and interior design, which together account for four of every five dollars earned by the group, lagged behind.

Operating revenues for the group rose 6.9% to $2.20 billion in 2002, an increase from $2.06 billion in 2001. Industry revenue growth was driven by the smaller firms, often in the form of unincorporated freelance or solo designers. The share of revenue earned by firms of less than $500,000 provided all revenue growth for the industry in 2002.

Firms reacted to hesitant corporate spending in 2002 by opting for the flexibility of contract labour rather than the commitment of salaried staff. From 2001 to 2002, salaries, wages and benefits for the group fell 3.8%, or $25 million dollars. This decline was offset by strong growth in sub-contracted design work and professional fees.

The operating profit margin for the industry group was 12.0% in 2002, up from 9.3% in 2001, but remained lower than the previous five year average.

Firms in graphic design, the largest industry of the group, earned $1.20 billion in 2002, a 4.1% increase from $1.15 billion in 2001. Rising revenues were due in part to increased transactions within the industry in the form of sub-contracted design work. In terms of contribution to gross domestic product, the industry grew only 1.8%.

Operating revenues of the interior design industry rose 6.4% to $561 million in 2002. Despite a boom in household spending on home renovations in 2002, the industry's share of revenues from households slipped to 30% from an average of 35% over the previous four years.

Operating revenues of industrial design firms recovered, rising 12.9% to $163 million in 2002. Operating profits improved dramatically, rising from 5.1% to 18.1%, as the industry kept tight reins on costs and shook off some large losses of the previous year.

Landscape architecture firms benefited from strong growth in housing starts, posting revenue growth of 13.3% to $161 million. Growth was particularly strong in Quebec (+28%) and Ontario (+18%).

Provincially, the design industry was noticeably concentrated in Ontario, which accounted for 42% of GDP in 2002 and 55% of revenues for the group. This ranged from a high of 59% for graphic design to a low of 44% for industrial design.

Available on CANSIM: table 360-0002.

Definitions, data sources and methods: survey number 4719.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Suvi Kanagarajah (613-951-5251; fax 613-951-6696; suvi.kanagarajah@statcan.gc.ca), Service Industries Division.