After a strong 2021, when commercial AV revenue growth exceeded initial expectations and hit 11%, 2022 is set up to hit a new high-water mark for commercial AV, reaching $263 billion globally, according to Fairfax, Va.-based AVIXA’s 2022 Industry Outlook and Trends Analysis (IOTA).
Growth will moderate in the coming years to a compound annual growth rate (CAGR) of 5.9% from 2022 to 2027. While this is due in part to the slowdown in economic expansion across the globe, commercial AV is still set to grow faster than most countries’ GDPs during the same period, AVIXA says.
IOTA by AVIXA presents data and analysis about the size of the commercial AV industry with a global perspective — plus regional and vertical breakouts. The research covers product trends, solution categories and vertical markets.
A Surge in Demand
“As COVID-19 restrictions decline and people regain comfort with gathering in person, the economy is transforming and [commercial] AV feels a surge in demand,” Sean Wargo, senior director of market intelligence, AVIXA, says. “Up to this point, the strongest solution areas were those offering adaptation to new behavior, such as conferencing and learning. This has shifted to events and performance as we return to in-person.”
After being upended during the pandemic, the venues and events market is demonstrating its resiliency through a high ranking among market opportunities. Per the report, the market is forecast to grow globally from $30.7 billion in 2022 to $47.2 billion (9% CAGR) in 2027.
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As consumers shift their spending back out of the home and inflationary pressures take their toll, residential spending on commercial AV is set to decline. This enables transportation to shift upwards, consistent with a shift in spending towards travel again. IOTA indicates that transportation market is forecast to grow globally from $11.8 billion to $18.3 billion (6.8% CAGR) from 2022 to 2027, AVIXA adds.
Recession-Resistant Markets
The fastest growing markets for commercial AV include many that are recession resistant. While pandemic recovery drives high growth in venues, media and hospitality, others are benefitting from more stable investment. This includes government, energy and transportation.
Despite some lingering challenges associated with the pandemic, APAC is resuming the economic expansion that began in prior periods, driven by rising corporate activity and a growing middle class looking to spend. The region remains a mainstay for digital signage, as retail growth pushes it to the top solution spot. According to AVIXA, digital signage in APAC is forecast to grow from $14.3 billion to $20.1 billion (7% CAGR) from 2022 to 2027.
While growth in collaboration solutions slows in the Americas, experiential solution areas like venues and events are rebounding and driving growth. Revenue for venues in Americas is forecast to reach $10.7 billion in 2022, rising to $16.1 billion by 2027 (8.5% CAGR).
Additionally, the Americas is the one region where services capture the most revenues ($2.1 billion in 2022). AVIXA states that control systems are where the growth is, as content must be managed and distributed in a venue.
Meanwhile, EMEA faces the greatest headwinds due to the wide-reaching impacts of the conflict in Ukraine, although growth is relatively strong nonetheless. While in-person brings a welcome surge to the venues market, energy — with 7.8% growth over the next five years — is also a key contributor thanks to sustainability efforts.
Continuing Supply-Chain Challenges
Per the report, while the commercial AV industry is experiencing strong growth, there are still headwinds in the current environment. Supply-chain challenges are reaching a peak, now that demand is at all-time highs. This makes it difficult for suppliers to keep up, particularly after having been battered by shortages and logistics issues over the past two years. Rising interest rates, as governments seek to mitigate inflation, are also spurring fears of a recession as spending retreats in response. Hiring too has become increasingly challenging in a competitive employment landscape, resulting in labor shortages.
Despite it all, AVIXA notes, the data from this IOTA shows tailwinds prevailing and commercial AV continuing to grow, even if the growth is somewhat muted as compared to the past year or so.
