Forecasting with Inflation

Should pro AV forecasts be adjusted for inflation? The answer will come down to assumptions.
Forecasting with Inflation

One of the persistent challenges with putting together a forecast for an industry, such as we do for pro AV each year in our IOTA reports, is to account for inflation. Reason being, as we are seeing today, the inflation rate at any given time may be much higher (or lower) than when the forecast was put together. It may also vary by differing amounts down at a specific product level. This leads users of the data to wonder whether the forecasted revenue should be adjusted to account for the impacts of price changes and if so, how? Whether and how to adjust will ultimately come down to your assumptions about inflation during the range of the forecast period and the currency value to peg to, whether today's or some previous value. Here at AVIXA we work with our outsource partner, Omdia, to develop an industry forecast that factors in an outlook on underlying pricing changes through time using available data and perspective at the time.  For the 2022 IOTA this means be building in an expectation of moderating inflation, and even some deflation in certain product areas, based on the data available for sectors within pro AV. To be sure, headwinds exist in the form of supply chain challenges and threats of recession, but demand for AV is strong. Just how strong? Check out our forecast when it releases at the end of May. 

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