AVIXA presents economic forecasts for the AV industry
After having reached revenues of 93 billion dollars in 2019, the professional audiovisual market in the Americas expects to face an 8% decrease caused by the effects of the COVID-19 pandemic, which will result in a figure of 86 billion dollars in revenues by the end of 2020.
This is indicated by the new 2020 AV Industry Outlook and Trends Analysis (IOTA) Americas Summary report, produced by AVIXA, the Audiovisual and Integrated Experience Association. However, a strong recovery is expected quickly, with a first rebound in 2021. While in 2022, industry revenues will grow to $95 billion and reach $108 billion in 2025.
"AVIXA's most recent projection was formulated in the first half of 2020 and is based on the assumption that market growth will resume during the second half of the year as businesses reopen and resume purchasing audiovisual products for professional use," said Sean Wargo, Senior Director of Market Intelligence at AVIXA. "Our forecast shows that many of the professional AV products and services that were already showing an upward trend, such as servers, digital signage, security, conferencing and collaboration devices, are some of the solutions that have rebounded from the impact of the pandemic.
Related to the COVID-19, the 8% drop in revenue in 2020 for the AV industry in the Americas is in line with the overall drop of 7.7% in the same year. However, the Americas will perform better than the Europe, Middle East, and Africa (EMEA) region, which faces an 8.9% decline. In contrast, the Americas will underperform Asia-Pacific, which is experiencing a 6.4% decline in revenue.
North America (Canada and the US) accounts for a dominant 87% of regional income in the Americas in 2020, a proportion that will remain very stable until 2025. Although smaller compared to North America, the South American market will experience more dynamic growth with a compound annual growth rate (CAGR) of 5.6% from 2020 to 2025, compared to 4.5% in North America. Central America (the region where Mexico is considered for the purposes of the study) and the Caribbean will sustain the highest percentage of growth in the region with a 5.8% CAGR.
The energy and utilities market is not only the fastest growing market in North America, it is also the fastest growing market on the continent with an estimated CAGR of 8.5% for the period 2020-2025. Given the impact of the pandemic on decreased travel, demand for oil has fallen, however, the market is expected to grow rapidly from improved economic conditions. This will drive investments in smart cities and smart power grids, with a high volume of digital signage solutions and control rooms, resulting in significant demand for LED displays, which will see a CAGR of 25.6%.
The transportation industry will present the fastest growth in Central America and the Caribbean, with revenues growing at a CAGR of 10.4%, to reach an amount of $331 million in 2025, compared to $201.7 million in 2020. Transportation also drives the professional AV industry in South America, where the market will grow at a CAGR of 11% in the period 2020-2025, representing an increase from 511.1 to 863.1 million dollars. This growth will be accelerated by investments made in AV solutions within transportation hubs in order to strengthen health and safety measures for passengers.
Education will suffer limited impact from COVID-19 during 2020, with a 2.7% drop in AV industry revenues, and an expected 4% rebound by 2021. Given the unprecedented nature of the disease and uncertainty about when a vaccine will be available, schools and universities will continue to invest in remote teaching solutions, including technology upgrades to facilitate live broadcasts from classrooms. This will not only drive SaaS (Software as a Service) distance learning solutions, but investment in remote learning support software, connectivity, and managed and cloud services as well.
Another market that stands out is that of media and entertainment, with a moderate drop of 5.7% in 2020, followed by a solid rebound of 7.4% in 2021. In the COVID era, where people spend most of their time at home, content consumption, from mobile apps to TV and video games, has grown considerably, driving the need for dedicated equipment for this purpose. The demand for digital entertainment and business content is expected to increase substantially during the years considered in this projection, leading to a growth in the use of production, storage and distribution equipment, as well as software and services.
Although it will generate only a moderate CAGR of 2.3% from 2020 to 2025, conferences and collaboration will remain the region's primary set of solutions. In the short term, the increase in remote working during 2020, coupled with limited access to facilities, will decrease the need for on-premise conferencing solutions. However, depending on the return of employees to their workplaces, even if it is under a limited capacity, AVIXA predicts that there will be even more needs for collaboration solutions between workers who assist companies and those who work from remote locations. This is expected to increase installation projects during the second half of 2020. In the long term, workspace trends will lean towards smaller, more flexible venues, so an increase in remote working will help sustain growth and keep conference solutions at the top of the agenda.
The IOTA report is produced by AVIXA in conjunction with Omdia (formerly IHS Markit), a global research and intelligence firm with expertise in a number of underlying supply chain markets, many of which overlap with the main components of the professional AV industry. Specialization provides connections with manufacturers, distributors, integrators, and large end-user firms that offer and consume AV products and solutions. This translates into data sources that are modeled in conjunction with macroeconomic data to generate the projections shown.
To learn more about the 2020 AV Industry Outlook and Trends Analysis (IOTA) Americas Summary, visit avixa.org/IOTA. The IOTA regional reports for EMEA and Asia-Pacific will be released in August and September. The IOTA Industry Overview, which explores global trends within the professional AV industry, is now available for purchase.