Supply-chain disruptions have been having a substantial effect on commercial AV businesses over the past several months. To learn more about why, Sound & Communications sought insights from AVIXA. Dan Ferrisi, Editor, chatted with Peter Hansen, AVIXA’s economic analyst, to chew over data from AVIXA’s new Macro-Economic Trends Analysis (META) report.
To open the conversation, Hansen touched on the oft-discussed microchip shortage. That shortage has dramatically increased car prices in recent months, for example. Asked whether the chip shortage has been driving the supply-chain snags reverberating throughout commercial AV, Hansen said it really hasn’t been. Rather, he said, the issues have centered on the following:
- A large spike in demand
- Continuing issues relating to the novel coronavirus (COVID-19) pandemic
- Lingering uncertainty
The discussion then pivoted, turning to inflation. The data indicates that inflationary pressures have had a disproportionate effect on commercial AV. Although price growth hasn’t been dramatic or beyond historical precedent—it has remained in the mid-single digits—inflation within commercial AV has outpaced inflation in the broader economy. With supply limited and costs increasing, AV professionals have had to implement strategies to maintain profitability and stay in business. Hansen expressed surprise at how effective a “pass-along-price-increases” strategy has been for AV companies that AVIXA analyzed.
Improvement Next Year
Looking ahead, Hansen said that AVIXA’s forecasts indicate that supply-chain problems will continue for a while longer. However, we can expect improvement next year. Barring unforeseen developments, 2022 and 2023 should be normalizing periods for both supply chains and inflation.
To learn more about how the pandemic has affected supply chains, watch our full video interview. And if you’d like to delve deeper into AVIXA’s economic forecasts and research data, watch our previous video interviews. For example, last month, Dan Ferrisi spoke to AVIXA’s Sean Wargo, as well as Hansen, about the association’s IOTA 2021 report.
To watch more video interviews like this one, click here.