What Inflation Numbers for Pro AV?

What Inflation Numbers for Pro AV?

If pro AV growth is 10% and inflation is 8%, is pro AV growth really only 2%? This question has been a common one for us in the past year. What folks are seeking is the "real" growth of pro AV (as opposed to nominal)--what is the actual output growth of pro AV, not merely the dollar increase? It's a good question, but it contains a fatal flaw: The 8% inflation figure does not fit pro AV.

Using 8% as a measure for pro AV is like using today's average temperature in North America to measure the weather in Miami. Our industry is a tiny subcomponent of overall inflation. Any pro AV signal in the inflation number is lost in the noise of the 10,000 other categories in inflation.

Here's a graph that digs a little deeper into the US inflation data and reveals how disconnected AV technology can be from the overall number. As you can see, while inflation overall was at 8%, oversupply in TVs led to a major price reduction, and audio equipment saw some inflation, but only at a mild 3% level. 

Figure 1. October 2021-October 2022 US Inflation by Category

Now a few caveats: First, this is consumer data, so it's related to professional hardware, but not the actual thing. Second, these are only a pair of categories among many that compose pro AV. Control systems, routing, servers, lighting, labor costs, software, etc.--there is so much more to AV than what would fall under the "Audio and Video Equipment" category. Third, it's US-only data. Global pro AV feels many more price pressures than the US alone.

We're continuing efforts to measure actual pro AV price change to make sure we actually reflect the changed output of our industry. We want real, not nominal. So far, our read of the data suggests pro AV prices have been more stable than overall inflation in the last year. Stay tuned for more as we continue to sharpen our understanding of prices--and also our estimates of growth!

Please sign in

If you are a registered user on AVIXA Xchange, please sign in

Go to the profile of Dimitar Dimitrov
2 months ago

Would be interesting to see similar data for services as well, not just equipment.

Go to the profile of Peter Hansen
2 months ago

Unfortunately, services do not show up in public inflation data. We measure labor costs in our annual employment survey, and the latest data suggests those rates are going up in the mid-single digit range (so a bit lower than headline inflation). Unfortunately, we've had to sacrifice timing a bit in order to achieve the quality and detail we seek, so our latest data speaks to 2021 salary levels. 2022 salary level information will be out in roughly May 2022.