We all know another economic recession will happen at some point. It’s just a matter of when. The pro AV industry has been living particularly well for a while now, so it almost feels like there’s a bit of denial about this in some circles. [related]
NSCA executive director Chuck Wilson has noticed it too.
“Times have been so good, so I don’t know if people remember the bad times,” he says in part 1 of our 2020 State of the Industry coverage. “Our job is to remind them about what happened in the last recession.”
What happened in 2007 and 2008 is the economy came to a screeching halt. AVIXA CEO David Labuskes was working for RTKL, one of the world’s largest architecture firms, at the time and he vividly remembers getting calls as the world’s economy crumbled to stop construction on many big projects
“We didn’t anticipate those calls the previous Monday,” says Labuskes. “I wouldn’t want to let anybody think they were ready for that.”
Labuskes notes that a global recession doesn’t necessarily mean the AV industry will struggle either.
“I wouldn’t say we’re a recession-proof industry, but the solutions we provide are cost-saving solutions that are more invested in in a recession than in a growth phase,” he says.
“We have to be disciplined in our business model, our approach to the marketplace and in the execution on that model. If we adhere to those principles, then we’re ready for a recession,” says Labuskes.
Be Prepared for the Next Recession
Most economists say the next recession shouldn’t hit us until 2021, with only a slight chance of it coming in the next 12 months. That doesn’t mean you should wait until this time next year to get ready though.
Bill Warnick, CEO of 2019 CI Integrator of the Year Solutionz Inc., says he doesn’t try to predict when a recession is coming. He just plans to be ready.
“Everyone’s looking for that key indicator, but it’s kind of like predicting the winner of a horse race,” he says. “I choose not to be a prognosticator. I want to instead build a business that’s prepared for it.
“I felt like we thrived a bit in the last recession. Some of the conversations we had culminated in future acquisitions,” says Warnick.
Diversified president Kevin Collins says the company’s global expansion has also set it up to be able to overcome whatever economic dip it might encounter when the next recession hits.
“If we have a recession in North America, we can help offset some of that by establishing ourselves in some of these other markets,” he says, pointing to Asia Pacific in particular.
