Pro AV Expansion Slows Again
Highlights
- November delivered a second disappointing AV Sales Index (AVI-S) in a row. After the low result of 53.4 in October, the November AVI-S registered 52.1. On the glass-half-full side, this is still on the positive side of the no-net-change line of 50. Pro AV is still growing—But it’s inarguably slow by our industry’s long standards. It is the lowest result since January 2021, when the world was pre-widespread vaccine and a winter COVID wave was ascendant. That said, this month’s result is much better than the January 2021 result: Context matters! Right now, we’re having slow growth amidst a fundamentally healthy, full employment industry. Project load and capacity are in equilibrium. That’s a stark contrast to slow growth in a struggling, COVID-hit industry like we had in January 2021.
Zooming in on detail from commenters, we see seasonal factors as a major trend. With the end of the year approaching, many companies are scrambling to spend budget while they have it. A newly elevated concern in this month’s comments were tariffs, with fears of new costs/barriers related to President Trump’s election and promises. Stay tuned on tariffs, we have more to come. AVIXA just released our latest State of the Industry report, which is available free to all enterprise members. The headline takeaway is no surprise to those following the index this year: Growth has fallen short of expectations, but the industry retains reasonable overall health that offers more than a few opportunities for smart companies to boost revenue. The details matter though, so do check out the full report to see where the challenges are greater and where the grass is greener.
- The AV Employment Index also dropped in November, sliding from a low but solid 55.8 in October to 52.9 this month. That is the lowest result since March 2021. Comments point to how this near-50 result is a product of steadiness, with a few respondents noting how past difficulties in hiring have finally been resolved leading to flat payrolls. Again, this is a strong contrast to early 2021 when the industry was very much unrecovered from the COVID crash and in dire need of serious growth. So, while slow growth is disappointing, the industry remains in a good position for now. A weakening economic context has been a primary cause of slowing pro AV expansion, as covered here in the past. This month, the U.S. labor news was a bright spot, with 227,000 jobs added as well as upward revisions from the past two months totaling 56,000. A healthy economy is wind in our industry’s sails, so this was a positive indicator that helps strengthen expectations for coming months.
International Outlook
The initial reading for November confirms the slowdown in the AVI-S is broad-based, affecting North America and the rest of the world alike. For North America, current growth is now extremely close to the no-net change line at 50.5 (in the initial reading for November).1 This probably reflects some short-term weakness stemming from uncertainty due to the early November election in the U.S., especially given that it is a moving average. For the rest of the world, the initial reading is a much more robust 56.3, in line with what was observed in October but down relative to prior months. Next month, we expect the two regions to converge.
1Due to the small sample, the North American and International indexes are based on a 3-month moving average. The November 2024 index is preliminary, based on the average of October and November 2024 and will be final with November 2024 data in the next report.
1AVIXA®, the Audiovisual and Integrated Experience Association, has published the monthly Pro AV Business Index since September 2016, gauging sales and employment indicators for the pro AV industry. The index is calculated from a monthly survey that tracks trends. Two diffusion indexes are created using the survey: the AV Sales Index (AVI-S) and AV Employment Index (AVI-E). The diffusion indexes are calculated based on the positive response frequency from those who indicated their business had a 5% or more increase in billings/sales from the prior month plus half of the neutral response. An index of 50 indicates firms saw no increase or decline in business activity; more than 50 indicates an increase, while less than 50 indicates a decrease.
Billings moving forward are relying on strictly new demand, rather than invoicing backorders new demand. The sales team has to learn to pivot from managing backorders & customer expectations to seeking new demand after almost 2.5 years of supply challenges that are now in the rearview..
AV Integrator, North America
It's fourth quarter and all allocated monies for 2024 have to be spent (invoiced & paid) before year's end, so projects underway are being driven to completion, projects not yet underway are in panic buying mode, and projects that lost their year's funding have their money reallocated to whomever can spend it before year's end meaning lots of non-installed stock items and consumables are being bought with those funds.
End user, North America
Things seem downbeat in [country]. Recent budget may be a factor, but generally budgets are down and projects are taking longer to proceed, so while enquiries are in line with other years, sales have dipped.
IT Integrator, EMEA
Methodology
The survey behind the AVIXA Pro AV Business Index was fielded to 2,000 members of the AVIXA Insights Community between October 25, 2024, and November 5, 2024. A total of 317 AV professionals completed the survey. Only respondents who are service providers and said they were “moderately” to “extremely” familiar with their company’s business conditions were factored in index calculations. The AV Sales and AV Employment Indexes are computed as diffusion indexes. The monthly score is calculated as the percentage of firms reporting a significant increase plus half the percentage of firms reporting no change. Comparisons are always made to the previous month. Diffusion indexes, typically centered at a score of 50, are used frequently to measure change in economic activity. If an equal share of firms reports an increase as reports a decrease, the score for that month will be 50. A score higher than 50 indicates that firms, in the aggregate, are reporting an increase in activity that month compared to the previous month. In contrast, a score lower than 50 is a decrease in activity.
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