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Broadcast Supply Sector Feels the Pinch

IABM says its index shows 'first indication' of a downturn.

(For “OMT Cites Radio Industry’s ‘Focus on Capital Expenditure Reduction'” click here.)

The international broadcast and media technology supply sector is not immune to an economic downturn.

IABM, an industry association that begin tracking sales in the sector three years ago, said that following “an extended period of strong sales growth and profit performance,” its industry index showed the “first indication” of a downturn in the sector.

The index includes a mix of 66 companies of various sizes, predominately from North America and Europe. It said companies analyzed in the report had sales turnover in the last 12 months of about $10.3 billion. Global sales increased by 11.9% year on year, but the rate of increase appears to have peaked. It said 74% of companies showed a profit in its latest results, “but the number moving into loss is increasing and the aggregate profit to sales ratio stands at 11.7% and is declining.”

CEO Roger Stanwell stated, “The cyclical peak rate of sales growth seen in both October 2006 and October 2007 has hardly happened at all this year. There is now an indication of the start of a decline in the long-term value of this index, for both North American and European companies.”

It said profitability has improved but only 9.3% year on year, the lowest increase since index tracking started three years ago. Profit growth in Europe has turned negative, a 1% decline over the previous 12 months.