This column first appeared in Sound & Communications.
What are all those colorful words floating around on this page? As you know, because you’ve experienced the internet lately, they’re part of what’s called a word cloud, or what we at InfoComm call a “sentiment cloud.” Every month, we’ve begun asking a panel of AV professionals to tell us about business conditions, including sales and employment trends. And we ask them to describe issues facing their businesses. The result of the former is InfoComm’s new Pro-AV Business Index; the latter comes together in the AV Index Sentiment Cloud: a graphical collection of the most commonly cited terms used to depict the mood of the industry.
Here’s what one AV professional told us recently:
“Across nearly all of our vertical markets, we have seen technology-update projects experience a significant increase, perhaps in part because there were three or four years when these investments were not being made and end users had to ‘make-do’ until budgets could be increased.”
For a survey last fall, another said, “Trends in technology are giving us new opportunities to educate our clients, which puts us in front of them a lot and helps us stay in the forefront. While work often slows down this time of year, we have seen it at least stay steady.”
There is a lot going on in the AV industry. From convergence, to commoditization, to greater competition, it’s hard to imagine a time when commercial AV has changed this much…and when the horizon has seemed so ominous. Fortunately, it’s happening at a time of increasing economic growth in many parts of the world, which spells opportunity, not fear. Granted, every AV company’s own economy is a little different (“Oil prices were in the tank late 2015 and early 2016,” said one pro. “Being in Houston, the majority of our business is typically in oil and gas. Luckily, we had begun to diversify and were able to keep afloat.”). Overall, however, indications are that the future looks bright: The winds of change are at our backs, not in our faces, and sunlight is coming through.
Last October, InfoComm introduced the Pro-AV Business Index, based on information gleaned from our AV Intelligence Panel about business performance. Our market research team builds the index using a diffusion index methodology. Other influential measures designed this way include the US Bureau of Labor Statistics’ employment index and the Institute for Supply Management’s Purchasing Managers’ Index (PMI), a key indicator of economic health in the manufacturing sector. InfoComm Director of Market Research James Chu came to us from the American Institute of Architects, which produces the much-monitored Architecture Billings Index (ABI), a leading economic indicator of commercial construction activity. (If you’re not keeping tabs on some of these indexes to gauge business conditions and help inform strategic decisions, you should.)
In a nutshell, the Pro-AV Business Index is actually two indexes: an AV Sales Index and an AV Employment Index. Each is calculated based on survey responses about business activity (in this case, sales and employment) relative to the prior month, and measures perceived change in sentiment. If more respondents see activity rising than see it declining, the index will be above 50; if fewer see it rising than declining, it will be below 50. As I write this, the most current AV Sales Index, released in February, was e healthy 58.6; the most current AV Employment Index was 57.7
In each case, the most recent index comfortably indicated positive attitudes among a majority of AV professionals although, to be fair, each had declined slightly from prior months. This is notable, considering a few significant events conspired to breed uncertainty at the end of 2016. Maybe you noticed: Britain’s vote to exit the European Union, America’s vote to elect Donald Trump and a long run of low oil prices, all of which had ripple effects through industries served by AV companies around the world. And, indeed, those factors came up in our surveys. But so did these:
“It seems like the AV community is becoming more involved in more facets of everyday life. That is pushing a need for AV in new ways that are more integrated throughout one’s daily experience.”
“As the market moves toward more advanced technology services, our deals and product offerings are becoming more complex. Our overall portfolio is changing to meet the needs of our customers.”
“Management [at customers] is a lot more careful in terms of investment. Hence, systems need to be ‘must-have’ rather than ‘good-to-have.’ They must be able to perform reliably and consistently to justify investment.”
“The shortage of talent and experience in our industry is making it an employee’s market….It is causing our business to increase recruiting efforts and base pay to prospective candidates.”
Such sentiments reflect the current reality of the AV industry. Audiovisual experiences have become pervasive. AV systems have found a home in companies’ enterprise technology strategies. As a result, a new set of enterprise decision makers is overseeing investment in AV solutions, and they have specific requirements and outcomes they’re seeking.
In addition, the AV industry has to keep up: It’s important not only to develop a skilled, robust workforce to meet customer demand, it’s also important to continually focus on why the AV industry is a vital part of enterprise technology success: If the AV solutions don’t deliver the right experience, the customer won’t achieve the desired outcome, whether it’s positive ROI, greater productivity or blow-the-audience’s-socks-off engagement.
As we get deep into the second quarter of a new year, the optimists outnumber the pessimists, according to our surveys. There’s a healthy cadre of steady-as-you go firms, but many more look out six months and see the industry trending positive rather than negative. If you’re inclined, let your sentiments be known. We’d love to hear from you.