The latest weekly industry impact survey done by the AV trade association AVIXA suggests the reality is really starting to settle in that the COVID-19 pandemic is going to hurt business for a long time.
The top takeaways this past week:
- Short-term blows to pro AV, while still landing, are no more prevalent than before.
- Companies still continue preparing to weather declines in revenue.
- Layoffs, as opposed to furloughs, appear to be ticking up.
The respondents are indicating they think the recovery will be protracted, revenue is under increasing pressure, and layoffs, as opposed to furloughs, are increasing.
This is happening at the same time economies around the globe begin to open and the work situation thaws. In many parts of the world, when governments initially imposed restrictions, many AV providers were still able to work on projects already in progress, based on their status as essential telecommunications or construction contractors.
But until recently, large swaths of society were still shuttered, meaning it was a matter of time before the wider economic slowdown might catch up to the industry.
“I’d be lying if I said we hadn’t taken a little bit of a hit from a revenue recognition standpoint and getting jobs done,” said the head of one AV integrator. “Anytime you see a good chunk of the country shut down, I think you’re going to get it.”
Said another, “I am expecting a slowdown because design projects are going on hold. Design usually takes six to nine months. It’s been three months of this already, so I’m expecting in three to six months, bid work is going to slow down because architecture is being told to wait.”
The survey found that while perceptions of negative impacts are not as high as they were in April, when the daily US death toll was counted in the 1,000s, but more than 60 per cent still see things as bad.
According to one AV provider respondent, “I think it’s very hard to tell which way things will go in the future, whether the future means tomorrow, next year, or five years from now. A lot of the decisions we’ve made about which way to steer our business in the past have been guided largely by what we hear from current and potential clients. I’ve heard very, very little from clients in the last two months or so.”
Some are eyeing a distant horizon. “We’re seeing more clients coming back,” said an AV provider, “but lots of planning with clients is for August and after.”
Asked to predict when the bulk of AV project would recommence, the most common answer among AV providers — with 19% — was “Not until next year some time.” But still, 56% said anywhere from July to October.
Among end users surveyed, 25% are thinking the bulk of AV project work will begin in July, possibly reflecting the current re-opening of many organizations and facilities. Another 32% said August-September.
There are, of course, projects underway now and there always have been. “We’ve been doing a lot of live streaming in churches. We’ve been doing some videoconferencing,” said an AV provider. “We’re currently working with some private schools in the area that are looking toward the fall … And things that were already in motion are moving forward.”
Companies also indicated issues and concerns around staffing are not going away.
So far, according to past Impact Surveys, AV providers have indicated their companies were largely turning to furloughs, rather than permanent layoffs, in order to right-size their workforces to ride out the pandemic. That may be changing.
When we asked AV provider respondents what share of their staff reductions were permanent layoffs as opposed to furloughs, our analysis indicated the average was 22%, up from 18% last week and 14% the week before.
Overall, throughout the pandemic, just over one-third of AV provider respondents consistently reported their companies have laid off/furloughed staff at some point during the ordeal. For the past seven days, 13% said their companies laid off/furloughed staff, a short-term measure that bottomed out at 9% on May 20.
Said one AV provider, “The negative impact is huge, as we have laid off good staff with families who depended on them. That was a difficult one for us.”
According to another, “We are sadly about to announce another round of temporary layoffs, as our initial projections have proven to be overly optimistic on the return of revenue-generating projects.”
But a third hasn’t taken that step yet — and is hopeful the company won’t have to: “We understand what our breakeven point is. And if we lay somebody off and then things come back around, they might get snatched up by somebody else. So, we don’t have a desire to reduce our staff, but at the same time, if the work isn’t there, we can’t keep people. We’ve communicated to our team that we’ll have to make the right decisions for the company but haven’t had to so far.”
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.