To gauge the pro AV industry’s performance each month, AVIXA created the Pro AV Business Index in September 2016. The organization’s latest report shows sales have contracted versus grown for the first time since the Index was established. As the novel coronavirus (COVID-19) has forced billions of people into physical isolation, demand for anything outside of absolute necessities has ground almost to a halt. The result for commercial AV is a massive slowdown in sales, with the AVI-S falling to 21.3. This score is 28.7 points below the neutral, no-growth level of 50.
The AV employment index (AVI-E) is showing more modest decline, with a score of 37.2. As a reminder, employment numbers tend to be a lagging indicator, as businesses often hesitate to hire workers in face of demand and lay workers off in face of revenue reductions. Unfortunately, this means we expect AVI-E to stay low longer term, even after the AVI-S starts to tick back up.
The COVID-19 crisis remains extremely uncertain. VIX—the uncertainty metric covered in last month’s report—reached a record high on March 16, closing at 82.69. Uncertainty has eased somewhat since mid-March, with VIX falling into the 40s in early April. Though much better than 82.69, as of this writing, VIX remains above any level it has reached since 2009.
To the extent that optimism is warranted, it is warranted for two reasons. First, there remains a chance that the crisis, as deep and severe as it is, will be short. If recovery can lift off within about two quarters of the start of the demand crisis this March, it has a good chance of being fast enough and big enough to pull most businesses and people through. Second, governments have gotten serious about financial support to help businesses and people bridge the gap from crash to recovery.
The report also indicates that COVID-19 seems to be a shared crisis. Both the North American and international AVI-S scores were well below 50. The international number appears worse than the North America one, but part of that is a function of timing.
To read the full details of AVIXA’s latest Pro-AV Business Index, click here.