Economic Outlook: Slow and Steady
It’s always been one of my favorite things that InfoComm gives away for free: the Economic Snapshot Survey. The April 2012 edition [PDF] just came out, and if you ever followed my blog at PRO AV, you know I like to root around the 64-page report for tidbits, insights and anything that might help hone a strategy for growing an AV business during still-turbulent economic times.
But first, some background. InfoComm started fielding the Economic Snapshot Survey back in 2008, when the economy was in the tank. You’ll recall that the AV industry didn’t immediately feel the impact of the Great Recession, so the results of the very first Snapshot, from September 2008, were fairly good. Comments like, “Despite the overall economic slowdown, we’ve never been busier” and “Decreased overall revenue, but overall profit increased.Working smarter!” were common. Which isn’t to say the AV industry had its head in the sand. Back in 2008, others said things like, “Can’t stay like this forever.” Which, of course, was true.
And that, really, was the impetus for the Economic Snapshot Survey: to track the industry’s business prospects through what turned out to be (and in many areas, still is) a historically difficult downturn. The Snapshot evolved over the years. This month’s is the 10th edition. Back in 2008, the Snapshot reflected the feedback of 222 industry professionals; the April 2012 Snapshot is based on 638 responses. In 2008, the survey focused on the business prospects of AV providers (integrators, consultants, programmers, manufacturers, stagers); today, it also tracks the outlook of AV end users, in an attempt to gauge demand.
Enough already? Cut to the chase? OK, really quick, then we’ll linger longer.
The industry’s outlook, as described by the 100-point InfoComm Performance Index (IPI), is holding steady. If anything, it’s very slightly up. This after the IPI cratered in the latter half of 2009. See the table below.
Historically, the AV industry has been (how should we say?) overly optimistic. Which means, when asked to gauge their performance for the upcoming six months, they consistently forecast it higher than they ultimately rate it six months later. And in the latest Snapshot, AV pros are as optimistic about the future as they’ve ever been in these studies. Nothing at all wrong with optimism. Here’s hoping that when the next Snapshot comes out, respondents rate their past six months at 70+, which could be an indicator that they’re gaining better visibility into the businesses.
(Interesting sidebar: Snapshot particpants were most prescient at the end of 2009, at the very beginning of what might be described as the market’s turnaround. In the October 2009 Snapshot, their forward-looking IPI was 63.8–not great, but much better than the all-time-low 57.1 they gave the prior six months, when the market was at its worst. In the February 2010 Snapshot, they rated the previous six months a 63.6, which was dead-on. So, like the rest of the economy, the AV industry may not know how optimistic to be about the future, but it knows better times when its sees them.)
Who’s most optimistic? Programmers, consultants, and pretty much anyone doing business in Latin America.
If there’s concern to be drawn from the April 2012 Snapshot, it’s about end-user demand. In addition to the InfoComm Performance Index, the Snapshot series chronicles the InfoComm Demand Index (IDI). Also on a 100-point scale, where zero indicates no AV spending and 100 means record spending, the IDI numbers bottomed out in October 2009, built their way back up to respectable levels in May 2011, and have been trending down again over the past two Snapshots.
It would appear that the corporate market has been a drag on the IDI. The education market, which makes up a good chunk of the Snapshot’s end-user base, is generally more optimisitic about spending. (Nuther interesting sidebar: Of the end-user respondents to the April 2012 Snapshot Survey, 25 percent said they manage both AV and IT.)
What’s going on here? It’s hard to tell from the numbers alone, but the answers could help guide AV companies as they pitch solutions to customers. The Snapshot Survey invites respondents to elaborate on their answers. When you read the April 2012 study, you’ll notice end users saying things like “conservative outlook,” “long-term value,” and “need-based approach” when referring to AV expenditures. Which may lead one to conclude (stop me if you’ve heard this), it’s more important than ever to sell solutions instead of systems; sell new ways to communicate rather than VTC codecs; etc. Focus on the need; focus on the value added.
There’s a lot more to glean from the April 2012 Economic Snapshot Survey. Breakdowns by profession, company size, geographic location; trends in hiring/firing; overall feelings about the economy. “The prevalence of staff downsizing has slowly but consistently declined, as have the prevalence of cutting salaries, benefits, or pay hikes/bonuses,” according to the Snapshot. ”Plus, salary hikes show the greatest level of increase of any of the business strategies examined.”
Root around for yourself. You can download the free PDF from the Market Research page.
And let us know in the comments section below: How’s business at your company?