Quantifying the Backlog

Quantifying the Backlog
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As we stare into the face of a possible recession next year, a pivotal question remains about the pro AV market and its ability to avoid the worst effects of a pull-back in demand -- just how large the project backlog is among provider companies. Throughout the year, our various data sources have shown that demand exceeded supply, setting up a backlog of projects as solution providers waited for crucial inventory and/or for resources to free up. This overhang matters now because the current expectation is for any recession to occur early in 2023, be relatively brief (perhaps two quarters), and be minor (1-2 points off of GDP). If this is the case, then a couple of months' worth of backlog (or more) could help provide a meaningful buffer. Yes, incoming new demand may slow, but outstanding project work may allow the supply chain and integrators to catch up, with perhaps just a short blip of decline to total revenues. Each company is likely in a different situation here, some with more extensive project queues and some less, making it a mixed bag of impact. Average amounts are not currently known, though AVIXA's research team will be collecting data to fill the gap in the coming weeks. Stay tuned as we take the pulse here and then share back what we've learned. In the meantime, we welcome posts of whatever you can share about your own company situation. While we remain hopeful some economies may yet avoid recession altogether, a robust backlog will also be a good problem to have should recession hit!

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