Take a moment to consider all the disruptions we are facing in the broader context of the global economy—changing trade policies through tariffs, supply chain challenges linked to conflict in the Middle East, rising energy costs due to the same, climate change, aging workforces, and of course AI.
The last is perhaps the one that the Pro AV industry is contemplating the most. A quick review of the news coming out of NAB provides a firehose of announcements of the next wave of use cases for AI. In fact, there is a good amount to talk about there, as the exact applications within AV solution sets crystalize. We’ll get to that, but first let’s back up a moment. What exactly is the context?
Optimism or Pessimism?
Coming out of a muted 2025, which saw lower growth rates for GDP and Pro AV specifically, has everyone wondering how 2026 might fare. Starting with GDP, IMF estimates show some challenges, particularly once the Iranian conflict is factored in. Growth rates for the Middle East were cut fairly substantially, creating a ripple effect around the rest of the world.
Estimates now show GDP in 2026 growing 3.1%, down from 3.4% last year. This means a weaker context for Pro AV, as arguably there is less capital to be invested overall, even if technology may win a disproportionate share, as it often does.
The counterpoints to a pessimistic outlook aren’t hard to find. A quick search reveals continued growth in corporate profits, historically low jobless claims, low unemployment rates, and robust consumer spending. Each of those provides a good fundamental for Pro AV investment generally speaking.
Economists continue to talk about an experience economy, in which consumers’ discretionary spending shifts to "micro-luxuries." Witness travel, entertainment, and dining related outlays here. The challenging news is that data shows a slower rate of growth in normalized consumer spending since the peak of the pandemic recovery.
The U.S. World Bank estimates for global household consumption numbers are growing at a slower rate over the past several years and into 2026 once the data is normalized to 2015, rising only 2.7% in 2025. As an early indicator of downstream investment in technology, this could portend softness ahead.
Fortunately, since corporate profits are up, even if consumer spending weakens over the near term, there is room for investment, assuming executives do not also become cautious in light of rising costs. One indicator suggesting the contrary is the Purchase Manager’s Index, a gauge of corporate buying intent. As with any similar diffusion index, scores above 50 indicate growth; the Q1 result shows 52.5, a slight increase from last year.
With consumer spending growth down and corporate plans improving, economists suggest we are entering a late-stage economy wherein growth comes from corporate investments to improve operations and gain efficiencies, instead of one driven by consumers. This is perhaps a good sign for Pro AV, though with many projects being driven more by experiences, this is only partially positive.
Evaluating the Outlooks
With context in mind, let’s turn to the actual outlooks. According to AVIXA, 2025 was a low watermark for growth and 2026 will rebound a bit. Caretta Research shows similar, though with a bit more conservativeness. Both put overall Pro AV spending growth closer to 4%. Based on past differences between GDP and Pro AV, these figures may appear a bit low, but not out of keeping with a general climate of concern. A tepid year of growth, with perhaps an upside more toward 5% is reasonable.
Multi-source data from Q1 helps shed light on the trajectory so far. AVIXA’s AV Business Index, a diffusion index based on surveys submitted by AV professionals, shows a slight uptick in March to near 60. Those paying close attention will immediately notice that March is typically the highwater mark for a given year and should be taken with a grain of salt. Though one month doesn’t make the year, the tone that signal sets is a bit of a cautionary tale. Respondents did indicate rising costs as a chief concern, which echo in other data indicating that the impact of tariffs may be finally showing up in the data.
Project work may be less profitable for the channel as rising hardware costs eat up the budget.
Turning to the Jetbuilt project management platform for AV dealers and installers offers another signal of a strong start to 2026. The total value of projects created on Jetbuilt increased 38% over the same period last year. While some of this is due to just the increasing usage of the platform, that is well above the baseline growth of 15% in project value for 2025. Thus, it is a clear sign of more projects in the pipeline at a higher value.
Here’s the bigger issue—while the average project values are increasing, the percentage of project costs from hardware is on the rise. While it hovered around 40% over the past few years, it shot up more than 50% in late 2025. This puts pressure on integrators from a margin perspective, as more of the revenue is consumed by hardware rather than markups or service. Once again, we have a potential signal of tariff impacts.
Two examples of the hardware cost increases felt by integrators can be found in data from PMA Research, a market research company focused on the display market. While a bit bouncy, the average prices in the Pro AV channel for both flat-panel displays and projectors have shown 10-20% spikes over the past several months. In the case of FPD and dvLED, this occurred in December with slight improvement since.
Projector prices have risen more steadily both for integrators and at the distributor level with increases more in the 25% range. Given that display prices had been dropping over the past several years due to a surge in inventories, this further supports the theory that inventory has diminished to the point where tariff impacts can be felt.
So where does this leave us as we come together at InfoComm to get a renewed pulse on the evolutions in AI? Here’s what we know: The volume and value of projects in the AV pipeline are showing good growth over last year. But project work may be less profitable for the channel as rising hardware costs eat up the budget. This will further require integrators to be creative in how they gain efficiencies to maintain margin.
Fortunately, AI may be poised to help provide process improvements. AI-powered design recommendation tools coming from project management platforms are emerging to help integrators create and deploy reference designs in a more efficient way.
