The Pro AV Sales Index (AVI-S) lifted 3.5 points to close out 2023 with a score of 60.4. This is roughly the same as the 61.2 of December 2022. 2023 was a year of slower growth than 2022—more on this later—so it’s nice to see an uptick at the end of the year. While 2024 will pose plenty of challenges, we expect similar performance to 2023 in terms of the AVI-S.
[AVIXA Report: Pro AV Growth OK Amidst ‘Soft Landing’]
Comments from survey respondents were widely varied. Seasonal trends were common and double-edged: On the negative side, December is the quiet season (especially for live events). On the positive side, December is a busy season for others, especially end users with year-end budget cycles. Supply chains and hiring difficulties continue to plague some users, though these issues have waned since their peak in 2022.
For supply, things are overall better. For hiring, the difficulty level is probably similar, but the impact is smaller because fewer businesses are hiring.
There are two ways to review 2023 in the AV index: average level across all 12 months and our year-end net question (the same as the monthly index question, except comparing the past two years rather than the past two months). We prefer the latter since it is a net measurement, while the averaging approach can miss scale (i.e., nine months of 5% increase and three months of 20% increase look positive in an average but are negative on net). Still, we report both here. And both tell a story of a solid year that was not as good as 2022.
For the monthly average, the index was at 58.8. This is the lowest year other than 2020, though it is not too far out of line from past non-pandemic years. For our preferred year-on-year net, the index was 67.1. This is meaningfully lower than the 2022 number of 72.5 and in line with the 2021 number of 67.9.
Together, this data tells a story of a positive but unspectacular year for Pro AV. When you add the context of how we entered the year and the level of macroeconomic/recession fear, this solid outcome is something to be celebrated.
[Supply Chain Lessons Learned]
Now for a caveat: Not all levels of the Pro AV industry experienced the same growth. AVIXA’s market intelligence, including this index and other research efforts such as our market-sizing IOTA and end user perspective exploration MOAR, focuses on final spending by end users. Normally, this is just simply the right way to total revenue.
This year, the legacy of 2022 supply chain issues created separation in revenue for different levels. For end users and integrators, the numbers here in the index are accurate (or as accurate as possible, at least). For manufacturers, reality is likely less positive than the AVI-S. The cause is delayed projects.A slice of 2023 end user spending/integrator revenue was payment for projects that were waiting on final parts for completion. Manufacturers already had their revenue from when the products were purchased, but much of the money didn’t pass from end user to integrator until the project installation was finalized after the last equipment arrived.
So, on the manufacturer side, 2023 revenue growth was more challenged. Distributors were likely in the middle, faring better than manufacturers but not as well as integrators. Note, this is partially a product of 2022 being an extra good year for manufacturers and distributors as compared to integrators.
Though the AVI-S accelerated, the AV Employment Index (AVI-E) stayed essentially flat, moving from 58.6 in November to 57.8 in December. This is right in line with its yearlong average of 58.2. While the yearly average of the AVI-E is lower than that of the AVI-S, it should be seen as a net-positive performance.
Aside from 2020 (which saw contraction), the more volatile AVI-S has outperformed the AVI-E by an average of 2.1 per year. That makes the 0.54 gap observed in 2023 a positive for the AVI-E. This perfectly aligns with the wider economy, where the labor market is shown as a bright spot amidst more mediocre results from other metrics such as GDP.
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.
