For Pro AV, ‘Uncertainty’ is the Word of the Week
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.
- Survey respondents are having a hard time envisioning how the pandemic will play out for their businesses, with greater shares citing declining revenues and slower sales.
- More respondents indicate their companies are resorting to layoffs and furloughs while seeking emergency funding.
- The rise in conferencing and collaboration to support remote work is likely not only a short-term trend, but it could also indicate new ways of working after the pandemic subsides.
Once again, more than 325 members of the AVIXA AV Intelligence Panel took part in the COVID-19 Impact Survey. And despite efforts by some local governments to begin relaxing social-distancing restrictions and gradually open their economies, industry uncertainty seems to be reaching a peak. The longer this extraordinary situation persists, the less clear the other side appears.
Said one AV provider, “Almost everyone I have spoken to does not have a clear understanding of the long-term impact this will have on their ability to do business, the economic impact, and the length of time it will take to recover.”
“As the virus spreads,” said another, “there are more project install date cancellations. We have been pushing projects out a month or two, but uncertainty is forcing companies to cancel scheduled installs.”
And this from a third: “In general, it comes down to uncertainty in commercial real estate. I'm a small AV consulting firm and we have several projects on the burner until this clears up. The question is, will we run out of working capital before this happens? Will we get approved for an SBA loan? Do we feel confident that even with an SBA loan, we'll be able to make back our losses and pay on the loan? The not knowing is the hardest part because it limits your strategy.”
In this most recent survey, fielded April 14-15, growing shares of respondents are citing declining revenues, slowing sales, and significant layoffs or furloughs as the COVID-19 pandemic continues to paralyze societies around the world.
This week, 74% of AV providers, including 83% operating outside North America, reported experiencing revenue declines over the prior week. That is the highest percentage citing falling revenues since AVIXA Market Intelligence fielded the first Impact Survey.
Nearly 72% of all AV providers cited slowing sales, also a new high and up from 66% last week.
When asked to estimate the percentage decline in revenues, 33% of AV providers, including 46% of international respondents, pegged the revenue drop at more than 50%. That, too, is the highest that measure has ever been since the survey began.
Every company is different. According to one AV provider, “Many AV companies, especially in live events and rental and staging, are experiencing 80 to 100% reductions [in revenue], with total cancellation of work.”
Said another, “We are an AV systems integration firm and have experienced almost a complete drop-off of business. Our primary client is the Canadian Federal Government, and they are not transacting beyond Tier-1 providers (i.e., direct with Cisco, Poly, Microsoft, etc., and not through integrators). Literally a 95% drop in revenue.”
The weighted average of revenue responses indicates an average estimated drop in revenues of about 19% across all AV provider respondents.
How Are Companies Coping?
Unfortunately, in order to cope with the economic challenges posed by the pandemic, more respondents say their companies have resorted to layoffs or furloughs. Nearly 44% of AV providers cited layoffs/furloughs as a response to the pandemic. Globally, respondents in North America are more likely to say their companies have instituted layoffs/furloughs (over 44%) than international respondents (30%).
What has changed rapidly has been respondents’ understanding of the extent of those layoffs/furloughs. Although 18% of AV providers said their companies had laid off/furloughed 1 to 5% of employees (up from 9% who said so last week), a whopping 30% of all AV providers cited layoffs/furloughs of more than half their staffs.
“[We’ve] required a two-week furlough or PTO for each employee between now and June,” according to one AV provider.
An even greater share of live events professionals — 64% of a limited sample — said their companies had laid off/furloughed more than 50% of their employees. Not a single live events respondent cited layoffs/furloughs of less than 30% of their workforce — an indication of how especially impactful the COVID-19 pandemic has been for the live events segment of our industry.
“Until we have a cure or vaccine, we are not going to have very many — if any — large events,” said one respondent.
In addition, growing shares of AV providers are looking for ways to finance operations during the pandemic. Slightly more than 54% said they’d applied for government loans, up from 46% last week, and 49% were dipping into their cash reserves, up from 39%.
Said one respondent, “Our boss applied for payroll assistance benefits in hopes that it will allow us to rehire two techs laid off in March.”
Looking Out for Staff...
By this point, companies with employees who can do their work from home have already implemented telework programs, cut business travel, and eliminated meetings and events. Still, some say their companies are also navigating the various guidance and regulations from local agencies in an effort not only to comply, but also to protect workers.
“Our company is in the process of drafting workplace requirements to limit personal interactions and will require the use of masks when we do return to the office,” said one AV provider.
“Employee safety is even more of a priority than ever,” said another. “Monitoring employee compliance is also being made a priority.”
...And Looking Ahead
Although the largest share of all AV providers (29%) is eyeing a return to project work in June, a growing percentage (19%, up from 15%) thinks July is likely. This subtle shift is due, in part, to growing shares of AV providers outside North America and live events professionals estimating July as when things start turning around. Still, a significant percentage of all AV providers (15%) has September circled on the calendar. Virtually no respondents claim visibility beyond that point.
On the other side of this pandemic, many continue to see opportunity in conferencing and collaboration (80% of end users and 83% of AV providers) solutions. Content distribution, to include streaming/broadcasting of content to remote audiences also rates highly.
AV customers indicate they will be looking at ways to incorporate what they’re doing now, under extreme circumstances, into their regular operations.
“Education will place more focus on distance learning,” said one end user. “I also think big business and larger government institutions will upgrade onsite conferencing facilities to integrate lessons learned during COVID-19. Lastly, I think medium and smaller businesses will develop and implement strategies to promote and manage more distance-working options, as it will take a while to completely go back to ‘full normal' social interaction.”
According to another end user respondent, “In-person learning will be paired with synchronous, online [learning] so that consumers will have the option of attending in person or online. There will likely be an uptake in flipped classrooms, with lectures being recorded in short videos and class time used for discussion, either in person or online.”
The next survey results will be released on April 24.
If you would like to participate in the AVIXA AV Industry COVID-19 Impact Survey or other AV Intelligence Panel studies, please join the AVIXA Insight Community at avip.avixa.org.
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