2025 Begins with Pro AV Growth at a Crawl
Highlights
- January started with a whimper for pro AV sales, as the index (AVI-S) dropped from a very slow reading of 53.1 to an anemic 51.1. While this level is still above the no-net change line of 50, it is low enough to be seen as essentially flat. All growth is good growth, so there’s at least that positive note here. However, this is not the note our industry wanted to start 2025 on. If there was one causative factor for the slow result in the comments, it was the new Trump administration and especially tariffs. The negativity came less from specific policies or new costs and more from a high level of uncertainty about what policy reality businesses could anticipate in the coming months. That aside, comments overall were fairly neutral, with seasonal factors a common sentiment as to why a specific company’s business was up or down.
The new Trump administration sparked a wave of tariffs, with new levies on imports from China, imported steel and aluminum, and imports from Mexico and Canada. In addition, he threatened tariffs on the EU and other geographies. The Mexico and Canada tariffs were both rapidly postponed, while the China and steel/aluminum tariffs remain in effect. The impacts to pro AV are twofold: First, much pro AV equipment is imported to the U.S. from China, so the additional taxes on them will impact end user costs. Second, the uncertain environment surrounding the U.S. tariffs and the resulting countermeasures is a general negative, as uncertainty disincentivizes capital investment. Stay tuned, as the 2025 first quarter META report will dive deep into tariffs and how businesses can respond to them.
- The AV Employment Index (AVI-E) was a happy contrast to the AVI-S, as it accelerated from 51.6 in December 2024 to 55.3 in January 2025. While 55.3 is not gangbusters growth for payrolls, it’s not bad either. Employment is reliably steadier than sales, so 55.3 is a result that would be low but not shocking in a period of normal sales growth. This result potentially suggests that the especially low AVI-S is a result of short-term factors like uncertainty and seasonality rather than a durable move towards non-expansion. That’s not to say the AVI-E is telling us things are great, it's just to say the AVI-E counterbalances such a disappointing AVI-S. In wider employment news, the U.S. employment report for January showed a quite modest expansion of 143,000 jobs, well below what was observed in the final two months of 2024. However, there was more net positivity as revisions to those final two months meant an additional 100,000 jobs were added to them, helping the unemployment rate tick down to 4.0%. Overall, the news points to an unspectacular but still solid employment market..
International Outlook
The rest of the world continued to outpace North America in our initial reading for January.1 Both indexes show low growth, though the rest of the world is comfortably ahead at 54.2 as compared to North America’s 51.0. Happily, neither region has dropped below the no-net change line despite how low the overall has been recently—though it’s always possible that could change in coming months. That said, our expectation is for both regions to remain above 50 and to potentially converge in the coming months.
1Due to the small sample, the North American and International indexes are based on a 3-month moving average. The January 2025 index is preliminary, based on the average of December and January 2025 and will be final with February 2025 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.
Finished up projects that had to be completed over the Christmas break, before the students returned. Now starting either planning for summer projects or finalizing plans for small projects over Spring Break. Anticipate some increased spending in Feb/Mar, and we do have one AV position advertised
End User, North America
Questions about Tariffs causing delay in purchasing decisions. Slowing demand. Need for Cybersecurity training for AV Network Design. No AVIXA Standards for Mass Notification systems requiring AV integration with Security and Life Safety systems.
AV Integrator, North America
New year, new money. And since no one wants their approved projects' budgets reallocated midyear for not being started or already complete, everyone is pushing for first and early second quarter projects instead of waiting as they might have previously.
End User, North America
Methodology
The survey behind the AVIXA Pro AV Business Index was fielded to 2,000 members of the AVIXA Insights Community between January 28 2025, and February 5, 2025. A total of 309 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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