Pro AV Sector Experiences Growth Amidst Challenges Posed by Uncertainty (as per AVIXA report)
In February, the Pro AV Sales Index (AVI-S) witnessed a positive rebound, surging by 2.9 points from 51.1 to 54.0. Despite this promising figure, the increase still represents slow growth for the Pro AV industry, which has set high standards.
For instance, February's index value of 54.0 was only undercut once in the 42 months of pre-pandemic data. Nevertheless, the acceleration is welcomed amidst concerns arising from tariffs and the resulting uncertainty.
As per the AVIXA Report titled "Pro AV Expansion Slows Again," providers and end-users alike articulated concerns about tariffs and the lack of clarity regarding the business landscape in the coming months. Apprehensions relate to uncertain pricing structures, unclear budgeting for future projects, and an ongoing cycle of announcing and postponing tariffs on Mexico and Canada, set to continue until April.
The primary impact of tariffs is on prices. Equipment crosses the border, incurring a significant tax for the channel, which must subsequently recover some of the cost from the end user. Secondary effects occur, too. For instance, in the United States, the S&P 500 dropped since Election Day, exhibiting a rare result for a Republican president. This decline can be more acutely observed in early March, when it became clear that tariffs on Canada and Mexico would indeed be imposed, causing the S&P to fall by 3%.
The AV Employment Index (AVI-E) remained constant at 55.3 in February. Unlike the AVI-S, this figure was a bright spot in contrast to the low AVI-S. Although the AVI-E is still somewhat higher than usual, given that employment changes more slowly than sales, both indexes now report similar levels of slow but meaningful growth.
According to the U.S. labor market report, the addition of 151,000 jobs in February yielded a decent job growth figure, despite a slight increase in the unemployment rate to 4.1%. Employment is known to be a lagging indicator, so any impact from tariffs and uncertainty would not be expected to materialize fully for several months.
The Pro AV Business Index report stems from a monthly survey of the AVIXA Insights Community, a research community of industry members that monitors business trends in commercial AV. For more details about joining the AVIXA Insights Community, visit [www.avixa.org/AVIP] for information.
- The concerns about tariffs and the unclear business landscape in the Pro AV industry are reflected in the assertions made by providers and end-users in the AVIXA Report, titled "Pro AV Expansion Slows Again."
- The levying of tariffs on Mexico and Canada has a direct impact on the prices of equipment in the Pro AV business, as the tax incurred at the border is subsequently recovered from the end user, consequences that can spill over to other areas of finance and commerce.
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