October continues a frankly disappointing year in the Pro AV Business Index. At 53.4, October’s result ties the lowest for the year so far, equaling the 53.4 of February (also nearly equaling the 53.5 of August). Under the topline result, October’s number is slightly different from the two months with such similar numbers in that it is a result less of people reporting “no change” and more of people reporting “decrease.”
It’s the highest percent reporting “decrease” since January 2021, a stretch of 44 months. While that sounds negative—and it certainly isn’t great—it should be noted that the “decrease” reports were counterbalanced by a meaningful percent of “increase” reports. For example, more respondents reported “increase” than last month, when the index scored 3.1 points higher (56.5). So, there were pros and cons under the hood of the low October result.
[AVIXA Report: Good News or Bad News?]
Is the high proportion of “decrease” reports a red flag suggesting an underlying issue? A read of the open-ended explanations of company business results rejects this hypothesis. Rather than a consistent stream of negativity around one or two issues—recession, price point, threat of IT, etc.—the comments were mundane. Some companies had contraction due to seasonal effects, while others reported no good deals closed this month despite being generally busy. This doesn’t assuage the disappointment of the continued mediocre growth shown in our index, but it does allay fears of an impending downturn.
The U.S. election results were finalized after the AVIXA survey results were in; while presidential transitions have a major emotional impact, they have little economic impact—and less for Pro AV. The one asterisk this time is President-elect Donald Trump’s threats of tariffs. This deserves close monitoring in the coming months, as tariffs and a possible trade war could be quite disruptive to Pro AV.
Unlike the AVI-S, the AVI-E was essentially flat from September, falling just 0.1 to 55.8. This is a low-ish result for the year, three points lower than the highest AVI-E and two points higher than the lowest AVI-E. This gives a bit more confidence to our previous conclusion that the AVI-S, while disappointing, does not presage a significant downturn.
Hiring is a lagging indicator, since business takes time to conceptualize, budget for, and hire new positions (or decide on and implement layoffs for that matter), but it is also a more reliable indicator in that it’s less prone to random shifts. Wider employment news was somewhat less positive: The U.S. October employment report showed just 12,000 new jobs, by far the worst result since 2020.
[On Your Business: Sales Is Not a Four-Letter Word]
The good news here is that it is a true outlier. Last month, the numbers surprised in a positive direction. This month, it’s a (bigger) surprise in the negative direction. We’ll have to stay tuned to see if this is a significant shift or just a blip in the ongoing trend of a slowly decelerating economy.
The Pro AV Business Index report is derived from a monthly survey of the AVIXA Insights Community, a research community of industry members that tracks business trends in commercial AV. For more information about joining the AVIXA Insights Community, visit www.avixa.org/AVIP.
