Ancillary businesses help support housing market boom

Interior designer Andrea Cornwell understands the world is always changing, and her ability to adapt to the changes has allowed her to succeed in times of prosperity and insulated her business during economic uncertainty.

“Just when you think you have an understanding on how to run an interior design business, the business environment shifts,” Cornwell said. “We try to embrace new opportunities in technology and design.

“We also try to develop new design ideas for the way people live, work, play and heal, to work in both growth times as well as downturn times.”

At a glance, one can see multiple signs showing that now is a time for growth in the Northwest Arkansas market: Realtor signs planted in front of new homes, construction workers setting foundations and home builders directing prospective buyers to subdivisions.

Just about anywhere in Northwest Arkansas a home is under construction, a real estate agent is quick to list and sell it. And while the construction and sale of the homes wouldn’t be possible without the builders or Realtors, businesses behind the scenes such as furniture movers, interior designers and landscaping companies have all seen their workload rise as a result of the booming housing market.

Cornwell’s interior design company, iSpace of Fayetteville, has seen a rise in business since the economic downturn.

“We were not hit that hard during the economic downturn due to our business taking risks and changing our design mindset,” Cornwell said. “While luxury items and services were the first to go in hard times, these new approaches are benefitting customers by offering them more accessible design and less expensive options.”

Cornwell, whose background is in architecture, started iSpace in May 2002 and has one employee. According to the Bureau of Labor Statistics, employment for interior designers is expected to grow 4% by 2024, which is at a pace slower than the average for all occupations. Interior designers earn an average of $55,510 annually. In Arkansas, an estimated 200 people are employed as interior designers.

In 2016, iSpace had 30 large interior design projects. Not only was it twice as many projects as the company had during the recession, but also the scope of the projects is much larger now.

“This year we are already working on six new interior design projects,” Cornwell said. She expects to see revenue rise between 20% and 30% this year. iSpace has appointments scheduled out as far as two to four months in advance.

While business has increased, she has not had to hire new staff. She prefers to keep her business small, as it allows her to remain personally involved in each aspect of the design process. “It is important that her clients are inspired rather than overwhelmed by the many decisions involved in the design process,” according to the iSpace website. “Design impacts lives.”

ECONOMIC IMPACT
The Great Recession happened between December 2007 and June 2009, but its impact was felt much longer as the unemployment rate didn’t hit its peak of 10% until October 2009, according to the Bureau of Labor Statistics. In February, the unemployment rate was 4.7%, down from 5% in December 2007.

In Arkansas, the unemployment rate was 3.8% in January, down from 5.2% in December 2007. The unemployment rate peaked at 8.4% in early 2011, before starting to decline in June 2011. The rate varied more in Northwest Arkansas, reaching a peak of 7.5% in January 2011 but has since fallen to 2.7%, a percentage point less than it was at the start of the recession, according to the most recent data available.

Russell Ellis, president of Bradford Yard Living + Landscaping in Rogers, said the low unemployment rate has made it difficult for him to find employees. During the recession, the company was looking at between 120 and 150 job applications. Since January, he’s only had 12 applications.

“We hire seasonally,” he said. The company’s peak season is March, April, May and June. According to the BLS, employment for landscaping and groundskeeping workers is expected to rise 6% by 2024, or at about the same pace as all occupations. Average wages are $27,460 annually, or $13.20 per hour. In Arkansas, 5,270 people work as landscapers and grounds keepers.

Bradford Yard Living + Landscaping has 14 full- and part-time staff. Over the past two winters, the business has been good enough that the company has not had to lay off workers, Ellis said. This was directly related to the warmer weather. During the recession, it was the “first time I’ve seen it so bad,” he said. “We really felt the biggest effect in 2008 and 2009.”

Since the recession, the number of jobs the company has taken on has risen by about 70%.

“We definitely feel like things have improved,” he said.

However, business has yet to improve to like what it was before the recession. A shortage of plant materials has impacted growth for the landscaping business, he said. Growers cut back after the recession and “are having to catch back up” as the economy improves. He expects the business to see the largest amount of growth in its lighting and irrigation projects this year. According to the National Association of Landscape Professionals, the landscaping industry accounts for $78 billion in revenue annually and has a 3.9% annual growth rate.

Ellis has worked for Bradford Yard Living + Landscaping for 26 years, and he purchased the company in 2014. It was established in 1974.

MOVING QUICKLY
Little Guys Movers was founded in Denton, Texas, 25 years ago and now has 13 locations in seven states. One location is in Fayetteville, started in 2010 just after the worst of the recession.

“The first year was pretty slow,” said Jarod Little, the Fayetteville location’s director of operations.

But after the first year, Little saw business in Northwest Arkansas double, and it doubled again in the second year. Since then, business has steadily increased. In 2016, the company helped thousands of customers move their items. Typically, it has moves scheduled out as far as two and three months, but Little said one customer is already set for a move next year.

According to the American Moving & Storage Association, 35.1 million Americans, or about 15.3 million households, move annually. About 82% of people moved within the same state, and less than 1% moved from the United States. The $12.6 billion moving and storage industry is comprised of mostly small businesses, and nearly 47% employ less than five people. Only 8.5% of the businesses employ 100 people or more.

Little Guys Movers has 35 full- and part-time staff and hired about 30 people last year. Little explained that the company is “kind of picky” as far as who is hired. If they don’t fit, “we let them go pretty quick.” But for those who do, they stick around.

The number of material movers is expected to rise 5% through 2024, or at about the same pace as for all occupations, according to the Bureau of Labor Statistics. Average pay was $27,840 annually, or about $13.39 per hour, and about 25% of material movers were part-time employees. In Arkansas, 26,590 people were employed as laborers and material movers.