News & Trends

The Impact Survey is a weekly assessment of pro AV industry trends, attitudes and perceptions in light of the novel coronavirus and COVID-19 pandemic.

Top Takeaways

• AVIXA Senior Director of Market Intelligence Sean Wargo will discuss the state of the AV industry Wed., June 17, at 2 p.m. EDT during InfoComm Connected.
• For the first time, more than half of AV providers are seeing a resumption of projects and an increase in business inquiries.
• To address revenue shortfalls, more AV providers are cutting staff and reducing pay.

There are several positive signs in this most recent COVID-19 Impact Survey: more companies operating at full capacity, project work is slowly resuming, thawing communication between providers and customers, and hints that revenue prospects may be stabilizing, even while — short term — revenues are still declining.

But at the same time the industry is getting its feet under it, and as companies are starting to see a clearer picture of what’s ahead, more firms are taking difficult steps, including cutting staff and reducing salaries. In some respects, feedback indicates companies are getting a handle on demand and scaling to an appropriate level of operations.

Said one AV provider, “We have seen a P.O. cancelled, several schedules delayed further, and a strong interest in touchless solutions to enable people to come back to work and avoid touch panels. We are operating at full staff, but well below capacity due to projects being held up. We can perform most tasks off site, with a remote connection, but the installation teams ahead of us cannot.”

According to another, “As AV suppliers, we are starting to see an increase in inquiries for supplies, but not many people are actually buying them. Many integrators we work with are still saying projects have been cancelled or put on hold …. There seems to be no end in sight.”

Said a third, “The company manages to pay salaries with government loans, and private loans and savings are being used to subsist.”

This week, 59% of AV end user respondents to the survey fielded June 9-10, said their companies had been impacted negatively by the pandemic in the last seven days. Roughly 57% of AV providers perceived a negative impact in the past week, down from 62% in the last survey and the first time that figure has fallen below 60% since AVIXA Market Intelligence began collecting impact data in March.

“The process of returning to in-person meetings and full business travel is going to be a long one,” said an AV end user customer. “In fact, we're barely just now starting to bring people back from WFH due to the need to revise workspace layouts and policies to meet social distancing guidelines. This will be a long haul … and some areas may never return to normal.”

Positive Trends Accelerate

In the most recent Impact Survey, 28% of AV providers reported operating a full-capacity project load, up from 24% last week; 62% reported working at a reduced capacity.

When we asked respondents about positive developments over the past seven days, AV providers showed the clearest signs of improvement: 51% said projects had resumed (up from 40% last week), 21% said revenues had improved (up from 16%), and 54% said they’d seen increased inquiries (up from 45%). As they ponder the AV supply chain, 19% of AV providers and 18% of AV end users said it had improved over the prior week (up from 14% and 9%, respectively, saying so before).

“Business is stabilizing, and we are slowly seeing an effective path to future success,” said one AV provider.

It’s worth noting that AV end users in our survey don’t report resumption of projects at the same rate as AV providers. Just 40% of end users said they’re resuming projects, effectively flat from last week, but still up overall from the second half of May. That said, the share of AV end users in our survey that reported an increase in inquiries for AV, leapt to 27% from 20%, indicating as business units begin getting back to work, they’re starting to increase their requests for AV services — a hopeful sign the “pull” through the AV value chain may be restarting.

“We are working remotely and strategizing to do more remote events for next year,” said an AV end user. “We’re getting staff prepared to make it happen.”

Asked to predict when the bulk of their AV project work would resume, the largest share of AV end users (27%) said July, reflecting the cautious opening of economies around the world. Another 16% predicted August and 22% said September.

When those AV end users bring in providers to help execute, projects lag slightly. Only 12% of AV providers saw the bulk of their project work returning in July. Another 18% said August and 21% (the largest chare of AV providers) said September. This is, of course, hyper-regional. Many companies never ceased project work during the pandemic. Many more have restarted some projects in the past several weeks, even if it isn’t the bulk of their work.

Continued Belt Tightening

Still, AV providers are making adjustments along the way to that next normal. In this week’s survey, 42% of all AV provider respondents said their companies had seen declining revenue over the past seven days, down slightly from 47%. Our analysis indicates that the average revenue hit over the past two weeks has been 20%.

Outside of North America, 58% of respondents reported declining revenue, a number that has increased. And according to a limited sample of live events professionals, live events companies continue to bear the brunt of the pandemic conditions, with 88% reporting reduced revenues over the prior week.

“One large venue reported possible October events they were hoping, but those have now been cancelled, due to quarantine, lock-downs, immigration restrictions, and travel difficulties,” said one AV provider. “We now anticipate events returning in 2021. However, due to some comments from clients about dissatisfaction with webconferencing, they’re looking at earlier resumption of events with oversized rooms at half capacity and distancing protocols. Many film, exhibition, and production companies are now working on protocols for life post-COVID.”

“We are seeing an uptick in late Q3/early Q4 virtual meetings,” said another provider. “Many have given up any hope that some portion of people could come together by then.”

Among all AV providers in our survey, belt-tightening continues. About 38% reported layoffs/furloughs at some point during the pandemic to address declining revenues, up from 33% last week; and 43% reported reducing salaries, up significantly from 30%.

Reflecting steps taken in just the past seven days, 18% of AV providers reported staff reductions, the highest that figure has been since the beginning of May. Fortunately, overall, the reported share of staff reductions characterized as permanent layoffs dropped this week, to 15% from 21%.

Meantime, firms continue to position themselves for recovery.

“We’re offering new solutions and services, entering new markets, and strengthening relationships with existing customers and vendors,” said one AV provider.

According to another, “We’ve moved our business model to integration based in thermal cameras.”

The Added Cost of Safety

As they get back to a fuller work schedule, more AV providers say they’re taking added safety measures. In the most recent Impact Survey, 78% of AV providers said their teams are wearing masks, up from 73%, and 49% are performing additional cleaning on jobsites, up from 45%.

Does that add cost to the project?

In a separate survey, AVIXA Market Intelligence asked AV providers if they were likely to pass long to clients the cost of health and safely measures on projects. About 24% said they were likely to pass along some costs, while 31% said they were unlikely (44% isn’t sure yet).

“You're probably trying not to sweat the small stuff,” said one AV provider. “We're trying to look out for the big stuff. I've got hand sanitizer and I've got masks. What we're worried about is team efficiency … If you have a project on the 30th floor and they're only going to allow three people in the elevator at a time instead of 12, I'm going to lose 40 minutes just getting them to the job site. I have to bring that up [with the client]. But we're trying to coach our guys around the best ways to handle those situations.”

The next survey results will be released on June 19.

If you would like to participate in the AVIXA AV Industry COVID-19 Impact Survey or other AV Intelligence Panel studies, please join the AVIXA Insight Community at avip.avixa.org.

Visit avixa.org for the latest on COVID-19 and its impact to the AV industry and to access our entire online learning catalog for free through June 12.