Design business’ confidence “lowest since COVID”
One in five design businesses are anxiously cutting costs, or even struggling to stay afloat, according to a new report.
But amid the doom and gloom, there are some reasons to be optimistic.
The Design Business Association (DBA) has just released its 2025 In Focus Report, based on its annual survey of its members.
The results mirror what many in the industry have been sharing anecdotally – that it’s a tough time to be running a design business right now.
The survey, produced in association with accountancy firm Moore Kingston Smith, asked design leaders how their company is performing.
Just 12.4% said “business is great and growing” which is just below the percentage (12.5%) who gave that answer in 2020 – that first, turbulent year of the pandemic.
It’s down slightly from 2024 (13.6%) but way down from 2022, when 25.7% – or one in four – said that business was booming.
At the other end of the optimism scale, 3.3% of respondents said they faced a critical situation, and were struggling to stay in business.
This was up from 2.7% last year, and higher than the 2.8% who felt this pressure in 2020. In some years of the DBA survey, like 2018 and 2022, nobody relayed this level of worry.
The percentage of leaders who said they were “concerned” about their commercial performance, and are “actively tightening their belts” was also up significantly, from 13.6% in 2024, to 19.8% this year.
Together, that puts 23.1% of respondents in the least confident categories.
“Some agencies have thrived in 2025, but for many across the sector it has been a tough year,” Deborah Dawton, the CEO of the DBA says. “There is no doubt that it’s a testing time, with confidence for the coming year the lowest it’s been since the pandemic.
“Making the right decisions, at the right time, about our businesses can be challenging in this landscape. Instinct matters, but what separates bold moves from blind risks is clarity and confidence. And that comes from using data to drive your business decisions.”
Many UK design leaders have described a perfect storm this year. Rising costs, and an increase in employer national insurance contributions, have had an impact, while a sluggish economy means many client budgets are down.
Add in the impact of AI, which has both taken work away from designers, and, many believe, lessened the value that those who buy design put on it.
In January, the World Economic Forum warned that graphic design was one of the jobs most at-risk from AI, based on a survey of 1,000 employers in 55 countries.
Green shoots in overseas income
The DBA report did include some findings that bring better news for design businesses.
The average income from overseas clients is up, at 36.5%. This is a slight rise from 2024 (33.5%) but the more significant story is longer-term.
In 2016 it was 20.3%, so it has risen 80% in the past ten years, with DBA members now making, on average, more than one third of their revenue from non-UK clients.
“This is testament to the high regard UK design is held in around the world,” Dawton says. “With the home market remaining stubbornly challenging, there’s opportunity for members to look beyond the UK for growth.”
Earlier this year, DBA membership director Adam Fennelow told us that the UK market was becoming harder to navigate.
“The domestic design sector is highly competitive, with many agencies vying for the same projects, often leading clients to prioritise cost over quality,” he said. “By seeking clients abroad, agencies are finding new markets that value effective, high-quality design.”
Another interesting finding suggested that the gap between London agencies and the rest of the UK is narrowing.
Historically, design businesses based in London could charge a premium, compared to those in the rest of the country (in the same way salaries often include a London weighting).
In some pre-Covid years, this premium was as high as 30%. But this year, the premium is down from 22% in 2024, to 18% for larger agencies of 20 staff or more.
And for smaller agencies, that premium has tumbled from 21% to just 11%.
“The adoption of remote working during the pandemic has changed the way many agencies and clients interact,” Fennelow explains. “There are now less in-person meetings, leading to many clients viewing agency location as far less important than before.
“Clients in general seem to have become more open to different agency structures too, meaning smaller businesses with a network of associates or freelancers now have a better opportunity of winning work at a higher price.”
As part of that picture, Dawton says they have seen, “a particular surge in growth for larger agencies located outside of London.”
A need for new skills
Minnie Moll, CEO of the Design Council, echoes this emphasis on the regional success story.
“It does feel tough at the moment, but the fact is that design continues to drive £97 billion value across the UK, with growing clusters outside London, showing real strength,” she says.
Moll believes one of the things designers should be doing to help build resilience is upskilling to meet new demand for eco-friendly design work.
“The demand for designing for environmental impact is rising fast, yet only 43% of designers feel equipped to meet it,” she says. “So businesses that will thrive are those investing in green design skills so they can respond to the growing demand for green design projects and embed design at the heart of strategy for a net zero future.”
DBA members can access the full report which goes into granular detail about industry fees, salaries, utilisation, income, recovery rates and other key operational factors.