The Consumer Technology Association’s newly revised U.S. CE industry forecasts for 2022 show the combined impact of multiple disruptive events around the world – from COVID-19 to a possible recession — resulting in an 11% decline in U.S. video hardware unit shipments overall this year.

Out of this, the Association said overall U.S. TV shipments will be even lower than expected at the start of the year, with TV volume of all types of sets dropping 15.3% to 39.4 million units for the full year. The number was revised down from the CTA’s original prediction in January of U.S. TV unit shipments dropping 13.3% to 40.4 million units in 2022.

Some 36 million of those televisions will be LED-LCD TVs, down 18% from 2021, the reports said. The decline was attributed by the CTA to diminished TV demand after surges the past two years, higher prices due to inflationary pressures and competition from growing sales of OLED-based TVs (both WRGB and QD-OLED panel types).

U.S. OLED TV unit shipments are predicted to rise 32% in 2022 to 2.37 million and are forecast to climb to 3.8 million units in 2023.

U.S. OLED-based TV factory revenue is forecast to rise 7% this year to $3.3 billion, and another 40% in 2023 to $4.6 billion, the CTA said. The competition between display technologies is expected to intensify over the next few years. Overall, LCD displays will generate $14.5 billion in factory revenues this year, the CTA believes.

Meanwhile, the CTA cited Bureau of Economic Analysis data showing U.S. gross domestic product (GDP) slid 1.5% in Q1 and is likely hovering around 0% in Q2, “putting the U.S. well on the brink of an official recession. The continued implementation of aggressive rate hikes by the Federal Reserve is likely to seal the fate of another recession, the CTA said. In the second half of 2022 the Association said it expects American consumers to further curb spending in the face of continued higher prices and diminished savings,” the report said.

 In turn, the CTA warned of a possible sustained recession running into 2023, “as the U.S. economy still relies on about 75% of its GDP from consumer spending.” The CTA said the key determinant to navigating and reaching the end of the coming recession will be how soon inflationary pressures can be relieved for consumers.

The CTA said supply chain constraints, exacerbated by China’s zero-tolerance COVID lockdowns are aggravating shortages in smart appliances and vehicles. In addition, heightened inflation, due in part to fuel and other commodity prices that spiked after the Russian invasion of Ukraine, is reducing discretionary consumer spending on tech products.

This prompted the CTA to make the rare call for an industry revenue decline in 2022. The industry will amount to $503 billion in retail value, down 0.2% from 2021, according to the forecasts. Putting this into full context, the industry is well above pre-pandemic levels, when it totaled $452 billion in 2019. The CTA expects hardware revenues will see a 1.4% decline, while software and streaming spending will rise 3.5%.

In related news, the CTA issued a statement Tuesday calling government leaders to lift tariffs on China-made products that have carried over into the current administration.

The Section 301 tariffs on U.S. imports from China stalled growth in production and employment in the United States, a separate CTA report shows. As a result, the Association said tech manufacturing jobs stagnated and, in some cases, declined after the tariffs were imposed.  

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“It’s clear that the tariffs have not been effective in dealing with China and are instead hurting U.S. businesses and consumers,” stated Ed Brzytwa, vice president of international trade, CTA. “With rising prices across all sectors of our economy, removing tariffs would mitigate rampant and harmful inflation and lower costs for Americans.” 

Additionally, other countries and markets that the U.S. does not have trade agreements with benefited from Section 301 tariffs. The biggest winners Vietnam and Taiwan saw near-immediate growth in exports to the United States of tariff-affected products, according to the CTA’s statement.

The industry trade group is urging policy policymakers to do the following:

•           Eliminate tariffs on consumer technology products to mitigate inflation, lower costs, and unlock the innovative power of the U.S. economy. 

•           Eliminate tariffs on inputs to revitalize U.S. jobs and U.S. manufacturing of technology products.

•           Immediately create new and expand existing trade agreements, including with Vietnam, Taiwan, Malaysia, and Thailand, to make manufacturing investments in the U.S. more attractive. 

In arriving at its recommendations, the CTA said it commissioned the Trade Partnership Worldwide LLC to analyze multiple sources, including trade and shipments data from the U.S. Census Bureau and employment data from the U.S. Bureau of Labor Statistics, to determine the impact on the consumer technology industry since the Section 301 tariffs were imposed.

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By Greg Tarr

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