The pro AV-focused trade association AVIXA’s research team has pushed out new business indicators that, for the first time in months, show things on an upswing.
Says the new AVIXA business index:
- We have a long road ahead, but pro AV sales are growing once again. This month, the AV sales index (AVI-S) reached 53.7, indicating growth for the first time since February. This represents an increase of 3.4 points from June, when the index’s 50.3 mark suggested no net change. It’s not all sunshine and rainbows yet, as this month’s figure represents only slow growth. But the operative word is “growth,” and all signs point to it continuing;
- This month, we folded in questions from the weekly COVID-19 Impact Survey we ran from March until the end of June. The top finding from the additional questions is that our panelists report a year-to-date revenue decline of 20.8% versus the same period for the previous year. Staffing was steadier, dropping 9.0%. Despite these big declines, providers show optimism for recovery, with a clear majority anticipating revenues to get back to pre-pandemic levels by the end of 2021, right in line with our Industry Outlooks and Trends Analysis (IOTA) projections;
- Second quarter GDP numbers came out for key markets, revealing the steep economic toll our world has paid so far this year. The EU statistical office reported that the eurozone second quarter GDP dropped 12.1% from its first-quarter figure, which was already down 3.6% from the end of 2019. U.S. numbers released by the Bureau of Economic Analysis showed an even worse situation, with a second-quarter drop of 32.9% on the back of a 5.0% first-quarter drop. The silver lining of these figures is that they roughly matched expectations. Economists and business leaders knew such massive declines were coming, so measures like equity markets did not significantly change in response to the news;
- As with the AVI-S, the AV employment index (AVI-E) also turned back into growth territory in July. The index increased 3.1 points from 48.1 to 51.2. To be clear, 51.2 is so close to the no-net change mark that it’s more a sign of steady payrolls than growth, but it is still encouraging. Comparing our international respondents to our North American respondents shows that this increase was driven largely by U.S. growth.
The index is explained this way:
The index is calculated from a monthly survey that tracks trends. Two diffusion indexes are created using the data, 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 5 percent 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 the business activity; an index of more than 50 indicates an increase, while an index less than 50 indicates a decline.
AVIXA says North America exceeded the rest of the world by 10 points in both June and July.
This unchanging gap between the two geographies means both are experiencing the same trend. Given the positive nature of the trend in the AVI-S in recent months, the equality of change is a good thing. We do note that the gap places the two regions on the opposite sides of the neutral growth line.
For now, our international respondents are still undergoing slow contraction, while our North American ones are experiencing growth on average. Given current trends, the international side should reach growth territory in September, though August is possible.
The research is based on responses of a survey sent to 2,000 members of the AVIXA Insights Community, July 27, 2020, to August 4, 2020. A total of 373 Insights Community members completed the survey.
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.