Latin America. After having reached revenues of 93 billion dollars in 2019, the professional audiovisual market of the American continent expects to face an 8% decrease caused by the effects of the COVID-19 pandemic, which will result in a figure of 86 billion dollars of revenue at the end of 2020.
This is indicated by the new 2020 AV Industry Outlook and Trends Analysis (IOTA) Americas Summary report, produced by AVIXA, the Audiovisual and Integrated Experience Association. However, a solid rapid recovery is expected, with a first rebound in 2021. While in 2022, the industry's revenues will grow to $95 billion and reach $108 billion by 2025.
"AVIXA's most recent projection was formulated in the first half of 2020 and is based on the assumption that market growth will resume during the second half of the year, as businesses reopen and resume the acquisition of audiovisual products for professional use," said Sean Wargo, Senior Director of Market Intelligence at AVIXA. "Our forecast shows that many of the professional AV products and services that were already showing an upward trend, such as servers, digital signage, security, devices for conferencing and collaboration, are some of the solutions that have rebounded from the impact of the pandemic."
Related to COVID-19, the 8% decline in 2020 revenue from the AV industry in the Americas aligns with the global drop of 7.7% this year. However, the Americas will perform better than the Europe, Middle East, and Africa (EMEA) region, which is facing an 8.9% decline. In contrast, the Americas will underperform Asia-Pacific, which experiences a 6.4% decline in revenue.
North America (Canada and the U.S.) accounts for a dominant 87% of america's regional revenues in 2020, a proportion that will remain very stable until 2025. Although smaller compared to North America, the South American market will experience more dynamic growth with a compound annual growth rate (CAGR) of 5.6% from 2020 to 2025, compared to 4.5% for North America. Central America (a region in which Mexico is considered for the purposes of the study) and the Caribbean will sustain the highest percentage of growth in the region with a 5.8% CAGR.
The energy and utilities market is not only the fastest growing in North America, it is also the fastest growing across the continent with an estimated CAGR of 8.5% for the period 2020-2025. Given the impact of the pandemic on declining travel, demand for oil has fallen, however, the market is expected to grow rapidly from an improvement in economic conditions. This will drive investments in smart cities and smart grids, with a high volume of digital signage solutions and control rooms, which translates into considerable demand for LED displays, which will see a CAGR of 25.6%.
The transportation industry will present the fastest growth in Central America and the Caribbean, with revenues growing at the rate of a CAGR of 10.4%, to reach an amount of 331 million dollars in 2025, compared to 201.7 million in 2020. Transportation also drives the professional AV industry in South America, where the market will grow based on an 11% CAGR in the period 2020-2025, representing an increase from $511.1 million to $863.1 million. This growth will be accelerated by investments made in AV solutions within transportation hubs in order to strengthen health and safety measures for passengers.
Education will suffer limited repercussions from COVID-19 during 2020, with revenue falling in the AV industry of 2.7%, and an expected rebound of 4% by 2021. Given the unprecedented nature of the disease and the uncertainty surrounding when a vaccine will be available, schools and universities will continue to invest in remote teaching solutions, including technology upgrades to facilitate live broadcasts from classrooms. This will not only drive SaaS (Software as a Service) distance education solutions, but investment in remote teaching assistance software, connectivity, and also managed and cloud services.
Another market that stands out is that of media and entertainment, with a moderate fall of 5.7% in 2020, followed by a solid rebound of 7.4% in 2021. In the COVID era, where people spend most of their time at home, content consumption, from mobile apps to television and video games, has grown considerably, thus driving the need for dedicated equipment for this purpose. Demand for digital entertainment and business content is expected to increase substantially during the years considered in this projection, leading to growth in the use of production, storage and distribution equipment, as well as software and services.
Although it will generate only a moderate CAGR of 2.3% from 2020 to 2025, conferencing and collaboration will remain the region's premier set of solutions. In the short term, the increase in remote work during 2020, in conjunction with limited access to facilities, will decrease the need for in-office conferencing solutions. However, based on the return of employees to their workplaces, even if it is under limited capacity, AVIXA predicts that there will be even more need for collaboration solutions between workers who assist companies and those who work from remote points. This is expected to increase installation projects during the second half of 2020. In the long run, workspace trends will lean toward smaller, more flexible enclosures, so an increase in remote work will help sustain growth and keep conferencing solutions first.
The IOTA report is produced by AVIXA in conjunction with Omdia (formerly IHS Markit), a global research and intelligence firm specializing in a number of underlying markets in the supply chain, many of which overlap with the major components of the professional AV industry. The specialization provides connections with manufacturers, distributors, integrators, and large end-user firms that offer and consume AV products and solutions. This translates into data sources that are modeled in conjunction with macroeconomic data to generate the displayed projections.
To learn more about the 2020 AV Industry Outlook and Trends Analysis (IOTA) Americas Summary, visit avixa.org/IOTA. The IOTA regional reports for EMEA and Asia-Pacific will be released in August and September. The IOTA Industry Overview, which explores global trends within the professional AV industry, is now available for purchase.
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