Weathering the Storm
Apr 5, 2010 12:00 PM,
By Randal A. Lemke, Ph.D., Executive Director & CEO, InfoComm International
It has been said that no matter how long the winter, spring is sure to follow. As those of us in the mid-Atlantic section of the United States seek to recover from a cold and snowy winter, we are seeking any sign of growth and rebirth. Similarly, people around the world have grown tired of the economic winter of late 2008 and 2009. We are seeking any signs of recovery, looking closely for any end to sluggish sales and general malaise facing all industries.
In the audiovisual industry, we got our first glimpse of economic rebirth at the Integrated Systems Europe (ISE) show in February. The show was vibrant, with more exhibitors and attendees than ever before. It is hard to sustain a gloom and doom stance when an audiovisual tradeshow has a more than 14 percent boost in attendance compared to the year before, especially when exhibitor rebooking rates are higher than ever.
Even as we relished this triumphant event, lingering doubts emerged. We just had a successful event, but was it a blip on the radar? Or was it just an isolated event that could be seen out of context?
Thankfully, InfoComm had been conducting some extensive market research in late 2009, which was released at ISE. The 2010 InfoComm Global AV Market Definition and Strategy Study found that despite the economic challenges facing the audiovisual industry in 2009, the industry still sold $68 billion worth of goods and services. Even more encouraging, the study projected a compound annual growth rate of 10 percent for the three-year period between 2009 and 2012. The AV industry is projected to grow into a $91 billion industry by 2012.
I am pleased to share that InfoComm has now found further evidence of a rebounding industry. Its most recent InfoComm Economic Snapshot, the periodic industry survey InfoComm conducts asking for economic feelings and opinions, finds that respondents are optimistic about the economy in all industry sectors. In fact, the 700 survey respondents were so optimistic that the economy was evaluated to be similar to the survey’s peak in 2008. A majority of respondents felt their company is in better financial condition now than it was six months ago, categorizing business as “good.”
More than 12 percent feel that the overall economy is already on the upswing, and another 38 percent feel the economy is stable and will pick up in 2010. Close to 32 percent feel that while the economy is stable, it will not pick up until 2011 or later.
Technology managers responding to the survey indicated the highest demand for AV services since InfoComm debuted the survey in 2008. The strongest demand for AV is being seen in the higher-education and government/military sectors, with one-third of respondents involved in these markets and venues reporting an increase in demand. There is also heightened demand in the K-12 education and healthcare markets. Factors that drive AV spending include pent-up demand for new systems, new construction, and the need to increase applications that will compensate for having to maintain service levels with fewer staff. Control systems and conferencing systems are the AV components in the greatest demand. The rental and staging sector is showing signs of an upturn, reversing a negative trend that had many in that sector discouraged.
In October 2009, survey respondents accurately predicted that the AV industry would be improved to this point. Now the industry is predicting a slight improvement in condition six months from now. It is important to note, though, that the recovery is expected to have its ups and downs, rather than a straight upward trajectory.
Considering how many challenges other industries have faced while weathering this economic storm, we’ll take the spring rain if it means a brighter overall future.
Members can access a full copy of the InfoComm Economic Snapshot Survey under Member Resources at www.infocomm.org/marketresearch.