Getting Back to the Business of Pro AV — Safely
The Impact Survey is a weekly assessment of pro AV industry trends, attitudes and perceptions in light of the novel coronavirus and COVID-19 pandemic.
- Overall sentiment is in a third week of plateau, though revenues continue to be under negative pressure.
- Companies starting to see a bright side indicate upticks in project resumption and inquiries.
- It appears that to date, most companies have opted for furloughs over layoffs, possibly indicating plans for a quick restart.
- AV providers tell stories of careful planning so that as they start working on projects, their employees will be safe.
Governments across the United States and around the world are preparing to ease restrictions and open their economies, even as the coronavirus pandemic continues its spread in many areas. Macroeconomics remain under extreme pressure worldwide. As of May 7 in the U.S., 3.2 million more people reportedly filed for unemployment insurance, and the double whammy of COVID-19 and social distancing continues to impact negatively the pro AV industry. But some companies say they’ve felt the dramatic effects, made the necessary adjustments, and begun to turn a page.
“Paycheck Protection Program funding was secured, providing for breathing room,” reports one AV provider. “But more importantly, things are moving again. Purchase orders tripled from March to April.”
In the latest AVIXA COVID-19 Impact Survey, fielded May 5-6, 70% of AV providers and 58% of end users said the pandemic had a negative impact on their companies last week. Those numbers have gradually ticked down since AVIXA Market Intelligence began fielding the survey, although that 70% share of AV providers saying their businesses had a rough week is flat. Overall, the percentage of AV providers perceiving negative impact peaked April 2 at 88%; the share of end users citing negative impact rocketed to 83% right out of the gate, holding at that staggering figure March 20 and 27.
Regardless of sentiment, the longer that economies have remained closed, the more drawn-out the effect on business. In this most recent survey, of AV providers feeling a negative impact from COVID-19, 75% said they’d seen a decline in revenue — the highest that figure has stood since the survey began — and 71% cited slowing sales. Note: These figures are only for respondents who said their businesses had been impacted negatively. In light of those negative-impact figures plateauing or ticking down, AVIXA Market Intelligence will begin taking weighted averages of all respondents, of which about 44% of all AV providers surveyed said their companies had seen declining revenue and 41% reported slowing sales. Such analysis will allow us to better gauge any recovery in the weeks ahead.
When asked to estimate how much their revenues had declined, a weighted average of AV provider responses pegged the figure at 28% — decline that has grown slightly over the past weeks.
“We’ve had two or three requests for quotes for possible event rental staging work in October 2020,” said an AV provider. “But we’re dependent on the global recovery … and whether some key vendors are still in business or have closed down their operations. For safety, we must consider alternate suppliers.”
This week, 30% of AV provider respondents and 43% of end users reported no impact/positive impact from the COVID-19 pandemic. As we did last week, we asked those respondents what positive signs they were seeing: 43% of AV providers and 42% of end users said projects were resuming, up from 35% and 28%, respectively. Also, 43% of AV providers who reported no impact/positive impact said they’d seen an increase in inquiries, up from 30% last week. As noted, these figures are only for respondents reporting no impact/positive impact. A weighted average of all AV provider respondents indicates only 13% are seeing projects resume and about 13% fielding increased inquiries. In other words, overall, any upturn is limited so far. AVIXA Market Intelligence will continue to examine trends in these averages going forward.
“New RFPs continue to be issued and new projects continue to be awarded,” said one AV provider. “We've had only three projects put on hold because of COVID-19, and two of those are cruise ship related.”
According to another AV provider, “We've reached a new version of working. Projects are still being completed, though sales are down. Fortunately, we had enough coming in when this started that we're good through at least the end of the year. One smart thing about mixing big projects with smaller ones: The variety is saving us.”
Layoffs or Furloughs?
To combat the revenue slowdown, 33% of AV provider respondents said their companies had implemented layoffs or furloughs. Asked to estimate the extent of layoffs/furloughs, AV providers indicated a weighted average of about 6% of their workforce — arguably modest considering the reported leaps in unemployment in the overall economy.
According to one AV provider in the survey, “We had a 95% furlough and returned a small number of people to work. This is an improvement over last week.”
All of which got us thinking: Which is more prominent, layoffs or furloughs? Are pro AV companies cutting staff or sidelining them until they can get back to work?
AVIXA Market Intelligence asked respondents who said their companies had undertaken layoffs/furloughs to estimate what percentage was actual layoffs? After analyzing the answers, we’re able to calculate a weighted average of about 14% layoffs, indicating the rest were temporary furloughs. Of course, there’s no guarantee some furloughs won’t become layoffs, particularly as government assistance funds run out, but the emphasis on furloughs could be a hopeful sign of companies planning to ramp up quickly as work begins again.
Getting Back to Work
Now, the million dollar question is, “What will getting back to work look like?” Anecdotally, companies appear aware that doing so will require cautious planning to protect AV professionals.
“We finally have our last tech back to work,” said one AV provider in the survey. “He had previously been under self-quarantine and he was not comfortable being on larger construction sites. We are now able to get into smaller, private projects where we are the only people in the area — sometimes the only ones in the whole building — so he is coming in to work on those projects.”
Another AV provider described crafting a plan to get back to work: “As our state is preparing to move into phase 1, we are implementing a reduced staff reopening plan, with approval from the local and state health departments. We have a written plan to minimize risk and are supplying extra PPE as needed. The bulk of our staff remains in a work-from-home status until our state enters the next phase.”
According to another whose company works on live events, “We are currently — albeit slowly — moving from phase 1 to phase 2 …. This transition could be a long time in happening — several months perhaps. We also emphasize that phase 3, which is a long way off, will not be a return to the way things were. In short, we’ll see hybrid events as the norm. Lack of international travel will support the growth of the hybrid event.”
When will the bulk of AV project work resume? Perhaps because economies are gradually opening, the greatest share of AV providers (30%) is estimating June, although that leaves a sizable chunk (53%) guessing anywhere from July to October.
End user respondents are a little less optimistic, with 16% indicating June, 49% estimating July through September, and now 14% saying 2021.
Said one AV provider reporting from Asia-Pacific, “Whilst some of our installation work has slowed to a trickle, we have been receiving more requests for design work and have five new staff in technical project coordination roles who commenced working for us over the past 10 days. We still have another two roles that we are yet to fill and are actively recruiting. We are beginning to see some early optimistic signs for the industry in the Asia-Pacific region, with an increase in RFQs for work to begin in the second half of the calendar year.”
The next survey results will be released on May 15.
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