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IC20 Day 2 Keynote: Crunching the Numbers

With 14 weeks of COVID Impact Surveys collected, AVIXA’s Sean Wargo charts the potential economic paths to recover for Pro AV

AVIXA brought sobering economic figures to the table with its Wednesday keynote address, State of Pro AV:  Emerging From Crisis. Led by the organization’s Senior Director of Market Intelligence Sean Wargo, the 30-minute slide presentation, comprised of 14 weeks of AVIXA’s COVID-19 Impact Surveys as well as on-going established market research, painted a cautiously optimistic picture for the industry as we continue to grapple with the economic fallout of the pandemic.

Looking at present circumstances, the live events and staging channel has been hardest hit with a near 100-percent negative impact due to COVID-19, while overall industry providers report a week-on-week improvement  in business, including project resumption, even as staff reduction and furloughs continue to tick up as the economic picture at industry firms becomes clearer.

“Fortunately, week to week, we are seeing a growing percentage of our provider companies who are saying they’re at full capacity,” Wargo reports. “That’s about 28 percent in the most recent week and it continues to get better. You can imagine this is as companies are able to adapt; endusers, their clients, start to come back on to their projects. They’re able to then ramp up as well. This is what helps us to offset some of those on the other end of the spectrum who are actually permanently closing.That is the dire and unfortunate consequence of these sort of situations. Some companies will have to fade out. We hope what that means is many of these in the more temporary mode, where they are reimagining, will come back stronger than ever.”

Wargo’s data point to a July/August timeline for when the bulk of provider projects will resume, indicating that in the next couple of months projects are coming back online and some recovery can begin. The caveat? It doesn’t mean things will stay that way, especially as a “W” shape — wavy peaks of recovery and decline — economic outlook is possible as the pandemic possibly resurges in the fall.

The good news is, according to Wargo, companies are adapting. Bringing in projections from the IMF Forecast 2020 GDP to show currently global decline across the U.S., EMEA and APAC,  Wargo outlines three driving assumptions shaping the near-future economic course: possible COVID-19 treatments by early 2020, a possible resurgence of the virus, and confidence (over or a lack thereof) in the economic recovery.

“One of the values that AVIXA puts forward is courage,” Wargo says, “and I think this a time that we need to, want to be courageous for the industry and at least provide a touch point so that there is some guidance. We know, as you can see, that we might wrong on the scale of the impact on the positive or the negative, but we’ve got good data that’s showing now at least the kind of relative position of both vertical markets and solutions as we go forward.”

Using the current global GDP — which declined by 3 percent during the pandemic — as a North Star, Wargo shows Pro AV revenue hitting $239B, a decline of about 7.7 percent in comparison to 2019 ($259B) and a 4-point deficit greater than the GDP — reflecting the “gut punch” the industry has had over the past few months.

“We think that full recovery is around the 2022 mark,” says Wargo, pegging that year to show $269B in revenue. “That’s the point where we exceed the peak that we set in 2019. …As an impactor for our industry in 2020, we are setting a two-year response time for this pandemic. That’s pretty good, but it reflects our ability to adapt.”

Globally, noting that EMEA was hardest hit economically by the pandemic with the U.S. not far behind, APAC is facing a more robust recovery in our sector.

Wargo also demonstrates vertical breakdowns of devastation and recovery, with hospitality, entertainment, retail and residential all taking sever hits, while transportation, media, energy, corporate, healthcare, and educations will likely be quicker to recover. On the solutions side, live events and digital signage, in particular have faced herculean challenges during the pandemic but are predicted to come back to some strength alongside security/surveillance, UCC, and education.

“We are in an industry that is strong because we are right where everything kind of meets together,” Wargo says. “As GDP recover, so too does Pro AV. As the landscape changes we have new opportunities, even if some are left behind. We have a diverse opportunity in front of us, whether it is geographic, vertical solutions, etc. Our ability to pivot those is what differentiates us as an industry.”

Watch Sean Wargo’s presentation and see Samsung’s Harry Patz outline how digital signage will help impacted markets, including QSR, SMB, retail and hospitality recover here.


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