16 September 2005
PLASA Industry Research indicates signs of recovery
The latest wave of PLASA's industry research - Market Trends 2005 - indicates that, after two years of declining value, the market for entertainment and communication technology served by PLASA members has started to recover.
Since 2001, a number of factors including global insecurity and economic instability, have had a negative impact on many of the key sectors that make up the entertainment and communication technology industries. However, in 2004 the market stabilised and the research suggests some slight growth in market value.
The researchers, Purple Market Research Ltd, estimate that the UK market in 2004, in terms of end user expenditure (and excluding any cross-selling among suppliers) was worth just over £1.1bn. The market comprises of five main product categories: professional lighting, pro-audio for presentation and performance purposes, pro-audio for architectural or commercial purposes (e.g. voice alarm, public address systems), staging and professional AV.
Market growth is driven by non-entertainment segments
The key industry sectors can be split into business applications, such as architectural installations and corporate events, and entertainment applications, such as performing arts, broadcast & film and night venues. Each of the five is valued at over £100m and together they are valued at almost £800m (73% of the total market value).
The last year has seen the continued prominence of non-entertainment sectors, with the architectural and building services sector and, to a slightly lesser extent, the corporate events sector representing key growth areas. Prospects for both throughout 2005 and beyond look good, although a global economic slowdown and the possibility of further terrorist attacks are potential inhibitors.
Traditional entertainment sectors such as performing arts, attractions and night venues remained relatively static in 2004, although concert and touring had another very good year in the UK. The education sector was again a source of many new projects and facility upgrades, although what is often seen as the 'education market' tends to straddle other sectors with education developments often encompassing a variety of facilities including theatre venues, concert halls and studios.
An improved global political situation in 2004 led to a marked increase in visitors to the UK, including new visitors from Eastern Europe, Russia and China. The number of tourists from China looks set to increase dramatically over the next few years. 2004 also saw a return of big spending tourists from North America and the year was, in fact, a record year for inbound tourism in terms of volume and value.
UK inbound tourism
It's difficult to judge what effect the terrorist attacks of July 2005 will have. In economic terms, there are hopes that the long-term impact of these attacks will be limited, but it seems likely that the UK, and London in particular, will be adversely affected to some degree.
On a more positive note, the almost simultaneous announcement of London as the host-city for the 2012 Olympics brought some good news for the city. Major developments should benefit many entertainment and communication technology companies.
The global market is also showing signs of recovery
The global professional lighting, pro-audio, AV and staging industry is estimated to be worth approximately £10.7bn in 2004. After a decline in the global market value between 2001 and 2003, the last year has seen that decline arrested, with slight growth recorded on all product groups.
The future looks positive
In the UK, a CBI survey of entertainment and leisure industries recorded high levels of activity and indicated that British businesses were the most optimistic in Europe about their prospects for 2005 and beyond.
PLASA members are optimistic about their performance across 2005, predicting a 7% year on year growth, although given the current economic uncertainty in both the UK and global markets, PLASA believes that growth in 2005 is likely to be closer to 5%.
According to the IMF, global economic activity is projected to slow in 2005 before stabilising in 2006 and picking up somewhat in 2007. Export growth in the USA is expected to remain strong in 2005 as a result of the weak dollar, although consumption and investment activity is expected to weaken slightly. The IMF projects growth of 3.5 per cent in 2005.
International trade is forecast to slow in 2005 and 2006, although the anticipated global annual trade growth of 7.5% still represents an improvement on the 1990s. Investment activity is also looking far stronger than in the 1990s. Global growth prospects remain robust, with world GDP, according to the IMF, projected to be 4.3% in 2005 and 4.2% in 2006 with economies such as India and China leading the way.
The future for both the UK and global markets looks positive.
Notes to Editors:
PLASA is the lead professional body for businesses that supply technologies and services to the event, entertainment and installation industries. Operating from offices in Europe and North America, the Association provides business support services to its growing worldwide membership, writes industry standards, leads the development of qualifications and focuses on improving the business practices adopted by the industry. With over 1100 members worldwide, it represents one of the largest member networks in the industry.
PLASA also runs successful media and events divisions and is responsible for the industry-leading magazines Lighting&Sound International, Lighting&Sound America and Protocol and the PLASA Show in London, together with the European and North American regional PLASA Focus events.