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AVIXA: ISE — a reflection of the industry
ISE: A reflection of the industry
Sean Wargo, Senior Director of Market Intelligence, AVIXA
We stand on the threshold of a resumed Integrated Systems Europe (ISE), now situated
in its new home in Barcelona. Just making that statement alone has a relieving sound to it, as it exists as another sign of the waning of the pandemic and the resumption of those activities we still value. This also makes ISE a further reflection of the industry it represents, beyond just the brands and products held within its halls, since a resumption of the in-person show is exactly the primary trend boosting the pro AV industry at large. To be sure, challenges and caveats remain, but just as ISE is recovering, pro AV is well on its way to resumption of true growth, whether globally or in Europe specifically. Let’s take a look at this recovery from the lens of market intelligence from the Audiovisual and Integrated Experience Association (AVIXA).
For starters, global industry revenues have posted two solid years of growth after the massive declines brought about by the pandemic-induced recession, which disproportionately impacted any industry reliant on in-person consumer engagement. The peak growth came in 2021 and moderated a bit in 2022, pushing revenues above the previous records set in 2019. This means each year from 2022 on will represent a new record as pro AV grows. The reason? While investments in hybrid working modes and content distribution have helped, the largest contributions come from a return to shopping, travelling, learning and being entertained outside of the home. All of this began to resume by late 2021 and gathered momentum throughout 2022, even with some ebb and flow along the way. And, while Europe has lagged a bit, new peaks will be set in 2023 and beyond.
Challenges ahead? The question now is whether 2023 remains a growth environment across and within the regions. Inflation, supply chain challenges, rising interest rates, labour shortages, and war all contribute to a rising risk of a global recession as consumers and businesses pull back in spending. These concerns are perhaps felt most keenly in Europe where war in Ukraine has a carry-over effect into neighbouring countries, and currencies are impacted by outside market forces. Within this context one might wonder about the impact to pro AV, since declines in economic indicators like gross domestic product (GDP) can often indicate declines in technology spending too.
New forecasts show recovery has been better than expected
The total pro AV industry reached a peak of $259B in 2019 before declining 17%.
Growth was better in 2021 than forecasted last year, reaching 11%.
Despite headwinds, this year continues the same, creating a record year.
Overall growth moderates through 2027 staying at a GDP busting 5.9% CAGR.
$259.0 -17.2% +10.9% +10.5%
$214.5 $238.0 $262.9
2019 2020 2021 2022
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Peak growth came in 2021 and moderated a bit in 2022, pushing revenues above the previous records set in 2019
Fortunately, available data indicates the pro AV industry will outperform the overall economy, exceeding GDP growth estimates. Thus, while next year’s growth is forecasted to be lower, the tailwinds of a return to in-person will prevail, leading to further gains in industry revenues. AVIXA’s Industry Outlook and Trends Analysis (IOTA) forecasts over 8% growth for pro AV revenue at both the European and global levels in 2023. Other indicators, like AVIXA’s quarterly demand study (MOAR) also show strength in end-user purchase intent.
What we have to thank in this situation is strong and lingering demand for many of the core AV products and services. So much so, in fact, that the industry has arguably struggled to keep up over the past two years. Supply of product made this challenging, but so too did capacity at the integrator/provider level after staffing reductions during the pandemic and tight labour markets since. This sets up a scenario in which pro AV is experiencing an overhang of demand into 2023, even as some economies are impacted by the recession. The below provides a bit more on how this is playing out in the solution areas, each of which attendees will see highlighted at this year’s ISE.
Conferencing and collaboration The first of them is conferencing and collaboration, the single largest solution area in Europe. Thanks to its role in helping companies stay operational during full remote periods, it was also the only solution that continued to see increasing investment through the pandemic. AVIXA estimates the European market will generate $12.6 billion in 2022. Growth is expected to slow during the coming years as investments shift back to supporting more in-person engagement, but it remains the largest spending area through the next five years. While a significant portion of the investment is in back-end systems, cloud-based services and software licensing, buyers will also be looking to improve upon the AV components integrated into workspaces that now must support hybrid and flexible modes.
Though collaboration dominates spending, other areas are poised for more significant growth. Two related areas rise to the top of the list here. The first are live events, which faced the worst of the pandemic impacts as all manner of spectator activities halted, causing a 55% decline to related pro AV revenues in 2020. The steep decline set up a situation where the recovery would also generate sharp increases, as is happening now. Industry forecasts show live events growing at an average of 9.7% in Europe from 2022-2027.
Performance and entertainment Similarly, performance and entertainment solutions, or the fixed installation ally to live events, are also expected to rebound well now that stadiums, museums and other attractions are once again open for business. Growth estimates here are also above the industry average for Europe at 7.8%. The gains in these two areas translate into similar improvements in the underlying traditional AV categories that support entertainment, whether in a temporary or permanent fixture. This includes large displays, speakers, lighting, staging and other related product areas. Expect to see more of these at the show.
The last area, also with a heavy display component, that relies on in-person activity is digital signage. With the two core markets for signage (hospitality and retail) seeing returning traffic, signage is once again expected to grow. AVIXA’s IOTA shows digital signage revenues improving by 6% over five years, hitting $8.1 billion for the European market in 2023. Large-format displays, video walls and content management systems are all a part of the story here and so are likely candidates for presence at ISE this year.
Ultimately, each of the above are indications of the renewed vibrancy of the pro AV industry overall, as is reflected at ISE. While headwinds remain, the resumption of in-person activities across the core markets serves as a dominant driver of growth, as evidenced on the trade show floor. Here’s to a successful event for all who are involved, as they begin to reap the benefits of an industry returning to growth!
