The Makings of a Real Recovery
InfoComm International's most recent Economic Snapshot offers the clearest evidence yet that AV companies are feeling better about their business future.
Earlier this year, InfoComm International published its latest Economic Snapshot, based on surveys of hundreds of pro AV providers and users. In this snapshot, the industry appears to be smiling.
"The data from the previous three InfoComm International Economic Snapshot Surveys suggested that the AV market decline had reached the bottom," researchers said in their report. "The January 2011 data provides further evidence that this is the case, and suggests that the coming year will be promising, with the InfoComm Performance Index (IPI) poised to surpass the highs seen in 2008. The broad-based nature of respondent optimism regarding future performance is an encouraging sign that 2011 will see a sustainable industrywide stabilization and upturn."
A closer look reveals this might just be the case. In prior snapshots, it was mainly larger AV companies that reported feeling a turnaround. In the latest report, smaller firms appeared to be bouncing back.
In each study, InfoComm asked respondents to evaluate their past six months and forecast the coming six months based on a scale 1 (bankruptcy) to 10 (record growth and profits). The result, on a 100-point scale, is the InfoComm Performance Index. Since October 2009, the IPI has been on a fairly steady march upward. In past surveys, the IPI indicated that survey respondents were often more optimistic about the future than real-world results would bear out. In other words, if, for example, they thought the next six months would be great, the following survey would reveal that those six months were just OK.
The latest survey indicates that companies may be gaining better visibility into their business results. When InfoComm asked in October 2010 for AV companies to forecast the next six months, the IPI came in at 68.9. For the current survey, when asked to evaluate the past six months, the IPI was 69.9, indicating companies' expectations weren't quite optimistic enough.
Looking ahead, AV pros peg their IPI at an impressive 74.3. That's the highest it's been in more than two years.
A little deeper in InfoComm's research, indications are that job prospects in pro AV may also be on the mend. There were still layoffs in 2010, but according to the study, the pace has slowed considerably. In the February 2010 Snapshot, 33.6 percent of respondents said they were laying off staff; in October 2010 that was down to 27.6 percent. In the most recent Snapshot, just 18.8 percent of respondents said they'd laid off workers.
Moreover, nearly one in five respondents said they were hiring more people than they'd expected. In October 2009, that share was about one in 20.
HOLD THE CHAMPAGNE
While it would appear from InfoComm's most recent Economic Snapshot that the worst is behind the industry, there are some warning signs worth monitoring. For example, end users don't appear as optimistic as AV pros. Still, the InfoComm Demand Index (not an apples-to-apples indicator to the IPI), was up to 62.8 from a low in October 2009 of 45.3. It's expected to be flat for the next six months. And while big and small companies alike appear to be enjoying better business results, the same can't be said for different types of companies. AV integrators, on average, are more optimistic than independent AV consultants and programmers, for instance.