2021 was the second year of the COVID-19 pandemic and some of the unusual effects of this situation are reflected in the music products import data found in this report. While supply issues continue to affect the industry and the data in this report, we still see an increase in guitars and decrease in school band instruments through 2021 that are now well known effects related to the pandemic.
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The 2021 ABS import statistics reveal an uplift in the overall music products market with a 6.76% value increase compared to 2020, and am 8.73% lift in volume. The industry’s import value increased again to an all time high of over $350 million.
After falling to a low point of 98.2 in 2020, the Consumer Confidence Index rebounded to stay above the long term average of 100 for all of 2021. For the first time since 2014, the CCI in Australia has remained above the OECD average throughout the pandemic including all of 2021, reaching 101.5 in April then falling to 100.3 in December.
Retail turnover started the year relatively flat, with 0.3% increase in January and 0.8% decrease in February, a more substantial decrease in the early months of the Delta wave (the lowest point being -2.7% in July), before increasing later in the year to a 7.3% increase in November. Overall retail sales ended the year relatively strong, with the December quarter result elevated compared to pre-pandemic levels.
There was no change to the cash rate of 0.01%, although at the time of writing this report that situation is changing. GDP rose by 4.2% after falling in 2020 by 1.1%, much of that growth coming in the December quarter. The Australian dollar ranged from 79.7 in February to a low point of 70.76 US cents in December, overall higher and more stable than the previous year.
The employment figures in 2021 changed substantially after the highly disruptive 2020, with employment growth increasing to 3%, wages increasing by 2.3%, and unemployment falling to 4%.
The story of the pandemic’s effect on music continues in calendar year 2021. Many of the same features were present: substantial disruption to live performance, school music education, lockdowns, and general caution and disruption in the tourism, arts, events, and other industries. Soon after the Delta variant led to lockdowns in Victoria and New South Wales, a music industry survey reported $84m worth of performances cancelled in the space of a month, with the strongest impacts in those two states. Live Performance Australia’s Ticketing and Revenue Report found that tickets sold in 2020 fell by 68% compared to the previous year. This precedes the long lockdown in certain areas during the second half of 2021 but indicates the scale of the challenge.
Last year’s AMA Market Report noted a surge for demand in guitars, keyboards and music technology, and a decline in traditional and school instruments, which appear to be associated with the effects of the pandemic. In the 2021 data we see some recovery from the unusual year of 2020, in some cases returning a normal kind of trend or something closer to 2019 levels, while the effects on guitars (up) and brass instruments (down) continue.
Supply issues have affected the industry and the exact effect on supply limitations aren’t measured here but for example this report notes an increase in the guitar category of 10% in volume, 16% in value, while some indications suggest that supply limitations hindered an even greater increase. US data for the same period shows a greater increase of 22% (both volume and value), and the increase was much higher for electric guitars than acoustic.
Imports of upright pianos returned to pre-pandemic levels (17% increase in volume, 15% import value, to over $19.6m) but Average Unit Value (AUV) decreased, due in part to the mix of imports. Year on year figures for grand pianos this year are skewed by a higher than usual number of high value German pianos in the previous year. This shows a 15% increase in volume but 11% decrease in AUV.
The 2021 result for digital pianos is against the trend of the past decade, which has seen increasing units but decreasing unit values, with a 7% fall in units but AUV practically unchanged. This suggests the category may have reached its price floor.
In a way, the import data for brass tells the story of the music education during the pandemic. Unit imports fell by 11% but AUV increased by 8% (import value - 4%), indicating that there were fewer instruments being imported and that they were the lower value products aimed at students, particularly beginners. The effects of lockdowns and other disruptions on school ensemble programs helps explain this.
The woodwind category overall is not in line with brass, with a 14% increase in units and 6% increase in import value. AUV however decreased by 6%, which brings us to the explanation that 'other woodwind', mostly recorders, recovered this year compared to a drop in 2020. It seems that the effects of the pandemic on school music programs has been felt in both woodwind and brass categories, but they are playing out in different ways at different times.
Orchestral strings barely increased in units (+2%) so the marked increase in value (14%) is partly due to the increased cost of Chinese imports, which dominate this segment.
The long term story of percussion imports is a slight gradual decline of about 1% per annum, although this category does not include electronic drums which offset some of this decline. Year on year, percussion recovered from the 2020 result with three of the four segments improving. The other category, cymbals, had a strong year in 2020 which might explain the fall in 2021. The most significant change was in the Educational and Other Percussion segment which saw a 23% (70,000) increase in units and 44% increase in import value, leading to approximately $4.5 million in retail value added in 2021.
The guitar category overall increased by 10% in units, 16% in value, led by a substantial increase in electric guitars (36% in units, 38% in value). The increase in value of acoustic guitars is due to the AUV increasing by 7%, rather than units which only increased by 1%. Bass guitars showed the second highest increase in the category (26% in units, 37% in value) while amplifiers continued the downward trend in value (4%) but increased slightly in volume (6%).
Digital Electronics showed modest growth, 4% in units and 6% in value, and an AUV of approximately $860 (retail). The US data shows significantly higher figures suggesting that supply issues may have limited Australian imports. The result for synthesisers is comparable to what is happening in the US, with an increase in volume (13%) and total value (6%), but a 7% decline in AUV due to the lower cost of Chinese imports. Other electronic instruments remained relatively flat.
Considering the major disruption to live music, the pro audio segment is surprisingly robust. The number of speakers remained almost identical but the total value and AUV increased by 4%. Amplifiers increased in value (5%) but showed a different effect, higher units but a steady AUV. Mixers fell in all measures by 5% or less, and sound processors made little change in overall units (+4%), value (+5%) and AUV (+2%) but in the context of longer term trends and both supply and pandemic issues, this is a solid result for the segment.
Higher value products boosted the value of DJ products, despite a slight decrease of 1.5% in units. Microphones remained steady in volume (+2%) but increased slightly in AUV (+6%). The context of less live performance but more home recording seems to have led to a more or less neutral result for pro audio, increasing slightly overall.
Traditional instruments remained steady while accessories fell in value by 4%, against trend, perhaps explained by pandemic and supply issues.
References
The information in this report is prepared based on import data received from the Australian Bureau of Statistics.
Additional sources:
Reserve Bank of Australia. Key Economic Indicators Snapshot
Australian Bureau of Statistics. Wage Price Index, Australia
Australian Bureau of Statistics. National, State and Territory Population
Australian Bureau of Statistics. Consumer Price Index, Australia
Australian Bureau of Statistics. International Trade Price Indexes, Australia
Organisation for Economic Co-operation and Development. Consumer Confidence Index
Australian Bureau of Statistics. Retail sales fall 4.4% but remain at elevated levels
Australian Bureau of Statistics. Australian National Accounts: National Income, Expenditure and Product
I Lost My Gig Australia. Tally update (5th August 2021)
Live Music Australia. 2019 and 2020 Ticket Attendance and Revenue Report (October 2021)
Music Trades. Annual Industry Census Report, April 2022.
