In a geographically divided result, Pro AV respondents in AVIXA’s Market Opportunity Analysis Report (MOAR), buyers survey were split on the market outlook for Q4. Large markets, such as the US, reported that capital spending will either stay the same or be reduced compared to last year. While developing markets, such as India, forecast increased spending, but at a slightly lower rate.

The survey of more than 2,000 global AV end users reflects the mixed market dynamics driving buyer decision making, including uncertain macroeconomic and political environments, end of year project cycles, and the return to more normal business cycles. Q4 also largely marks the end of the surge of post-pandemic spending, triggered by the return to the office and the resurgence of live events.

In the US, for example, businesses are cautious about spending as the economy appears weak, and the presidential election points to at least two different directions for business policy – an extensive tariff regime or following current administration policies. Although the Federal Reserve lowered interest rates by an aggressive half a point, it will be months before the change impacts the US economy. In the meantime, the rate cut is seen as a signal of government concern.

Also concerning for the long term was a MOAR finding that the US is in a year-long downward trend in the share of capex assigned to Pro AV. The Q4 result of 25% was the lowest in three years and the first time the metric dropped below 30%.

Drilling deeper into the study, the buyers shifted priorities for Q4. While the corporate vertical market was once again the top expected growth area, with 68% of the buyers naming it as a priority, venues and entertainment were cited by only 33% of the buyers. This result suggests the stabilization of the hybrid office market and the end of the live events post-pandemic surge. The priority shift was particularly notable among India and China respondents.

Education was also seen as receiving lower growth investments, as government spending initiatives subsided and await renewal in major markets. Additionally, hospitality spaces – lobbies and waiting areas – were set to receive increased spending in most countries, except the US and France.

From a product perspective, two kinds of market dynamics can affect investment – immediate changes in demand or technology – or long-term trends. The Q4 MOAR evidenced both, with a reduction in growth expectations for video projection, and a continued increased interest in software. In the short term, LEDs and other display technology are replacing projection technology. In the long term, software continues to incrementally add value to product offers, and in some cases replace unit sales of hardware elements.