The Pro AV trade organization AVIXA has pushed out the latest version of its weekly industry impact survey, launched a month ago to track the tangible and less tangible impacts of the pandemic on integrators, service providers, consultants, vendors and techs.
The top-line findings are, not surprisingly, that jobs are in jeopardy, government assistance programs are being sought, and many firms are already speculating about what the other side of the pandemic might look like.
From the latest summary:
As AVIXA considers the results of this week’s COVID-19 Impact Survey, it’s in the context of reports that some parts of the world may be seeing cases of the coronavirus peak, while others may be facing fresh outbreaks.
In the U.S., over the past couple weeks, the narrative has been around the extraordinary efforts of health care workers and first responders to treat growing numbers of infected people. It’s also been about job loss.
After years of uninterrupted job growth in the U.S., record numbers of unemployment filings related to measures taken to minimize the spread of the coronavirus have suddenly reversed that trend. As we write this, yet another 6.6 million Americans filed jobless claims — on top of the roughly 10 million over the prior two weeks.
AVIXA launched the Pro AV Index in September 2016 to gauge monthly sentiment about sales and employment in the industry. It comprises two measures: the AV Sales Index (AVI-S) and the AV Employment Index (AVI-E). An index score above 50 indicates growth. In all the months and years we recorded, the AVI-E never dropped below 50 (neither did the AVI-S, for that matter).
This month, the AVI-E hit a score of 34. (Internationally, the AVI-E dipped below 50 in February, when it reached 39.7. The international breakout is a moving average, so its negative reading in February is a partial reflection of the negative reading in March). The AVI-S has cratered to 21.3, indicating a significant and sudden slowdown in pro AV sales.
Many are handling the current situation as best they can. Said one AV provider, “We have in place our plans to deal with the travel bans and social distancing mandated by the federal government and, so far, they appear to be sufficient to enable us to carry on as much business as possible without risking the health and well-being of our staff or customers.”
Beginning to Feel the Job Squeeze
Employment trends like those indicated by the falling AVI-E are reflected in the Impact Survey results. This week, in asking respondents for the first time about the steps they’re taking to maintain their companies during the coronavirus pandemic, 43% of AV providers said they were implementing layoffs or furloughs. More than 38% were reducing salaries. (In a very limited sample of live events professionals, 73% said they’d resorted to layoffs/furloughs and 91% were reducing salaries.)
When asked what share of their companies were being laid off or furloughed, answers covered the gamut. The two most popular were “6 to 10%” laid off/furloughed (with 16% citing that range) and “more than 50%” (also cited by 16% of respondents).
Internationally, the most commonly cited figures for layoffs/furloughs were “11 to 20%” (22% of respondents) and “more than 50%” (17% of respondents). Clearly, the impact on jobs in the pro AV space varies greatly.
Said one AV provider, “As many as possible are working from home. There have been both furloughs and people laid off, which is to be expected. They have also asked us to look at possibly taking PTO, if feasible, since when jobs ramp up again, we probably won’t have that luxury.”
Seeking Help to Weather the Storm
For the first time, AVIXA Market Intelligence asked survey respondents if they’d applied for government support during these times. AVIXA held a webinar this week about the U.S. CARES Act and how companies might apply for financial relief. According to the Impact Survey, 46% of AV providers indicated their companies had applied for government support; 39% said they’re using cash reserves to fund operations.
When asked about the steps they’re taking, 30% of AV end users (customers) said they’d applied for assistance, but 33% of end user respondents either didn’t know or wouldn’t indicate how their companies were dealing with the hit to their businesses. Said one, “It’s mainly business as usual in the work-from-home environment. I’m finding that more of us are becoming used to this way of working and have fine-tuned our skills in the remote work technologies.”
What’s not business as usual for AV end users and providers is the industry’s supply chain. For the fourth consecutive week, the share of Impact Survey respondents indicating a negative effect from supply chain disruptions has grown. This week, 46% of both end users and providers said supply chain disruptions had an adverse effect over the prior week, up from 35% and 42%, respectively.
Still, some work is getting done. Said one AV end user, “Projects in-flight or in engineering and design phases are still moving forward in the hopes that we can get those installed on a semi-normal schedule. Projects that are not yet to that point are increasingly being put on hold.”
And this from an AV provider: “Most of our project work seems to still be going ahead, but schedules have all changed, with deliberate project-completion delays, as clients are in no rush to complete their projects because they are not sure what revenue they can generate.”
Peering Over the Horizon
Looking ahead, the largest share of overall end users and AV providers (25% and 31%, respectively) still cite June as the month they’ll most likely see AV projects resume. The percentage predicting a May recovery has fallen slightly.
Outside North America, predictions continue to stretch slightly further, with a moderately larger share looking toward September.
Notably, when asked for their thoughts on the current situation, many respondents have started thinking about what’s next. Here is a sampling:
According to one AV provider, “When things begin to return to normal, we anticipate a large spike in areas like live events and themed entertainment.”
According to another, “We have continued pursuing remote teleconferencing options for both internal and external work, when available. We are experimenting with new ways to present both live and VOD-style events for clients who still wish to host their events … in the next month or so.”
Said one live events professional, “Remote productions will only take us so far. At some point, on the other side of the curve, live meetings and events will accelerate. The question is, what does that acceleration look like? A gradual rise or a rocket ship?”
And from one end user: “Remote-worker capabilities have expanded and improved. I see them being developed even more after this.”
Dave Haynes is the founder and editor of Sixteen:Nine, an online publication that has followed the digital signage industry for some 14 years. Dave does strategic advisory consulting work for many end-users and vendors, and also writes for many of them. He’s based near Halifax, Nova Scotia, on Canada’s east coast.