2022 Market Report: Summary

Economic snapshot	2022	2021	2020
Economic Growthi	2.75%	4.2%	1.1%
Unemployment Rate	3.5%	4.0%	6.3%
Cash Rate Targetii	0.1% (Jan) 3.10% (Dec)	0.1%	0.1%
Wage Price Indexiii	3.4%	2.3%	1.4%
Populationiv	26.27 million	25.75 million	25.68 million
Consumer Price Indexv	7.8%	3.5%	0.9%

Throughout 2022 the Australian economy entered a period of increasing inflation and interest rates, creating difficult conditions for retail trade in consumer products. Unemployment fell below 4% early in the year and stayed there, reaching a low point of 3.4% and ending the year at 3.5%.i Wages increased at a faster pace than usual, with the Wage Price Index moving above 3% for the first time in almost 10 years. However, higher wages and low unemployment were matched with higher interest rates, with the RBA cash rate moving from 0.1% to 3.1%, and consumer price index reaching a high point of 7.8%.

The 2022 result for the music products industry is mixed for various reasons, some related to supply chain issues and the pandemic. Some categories are recovering steadily from a drop in 2020 (eg. Brass), others could not maintain the high levels reached in 2020 for a number of reasons including supply (eg. Acoustic Guitars), others have been growing for the past three years and had positive results in the short and longer term by all measures (eg. Grand Pianos).

When looking at the Australian data, it is important to realise that this year the AMA is using a different methodology to analyse import statistics. Some categories have similar results but others are higher, in some cases substantially. Some filtering of the data is necessary and some assumptions need to be made, but in most cases the filtering is lighter because the methodology makes fewer assumptions.

The 2022 ABS import statistics reveal an increase of 12% in the Total Value of the overall music products market compared to 2021. Total Units is a useful indicator but less so at this level (counting $17 AUV Print Music and $15911 AUV Grand Piano as individual units), there was a 16.8% drop in Total Units.

Looking at instruments only (excluding Pro Audio, Print Music and Accessories), there is a similar result but the increase in Total Value is greater (14%) while the drop in Units is smaller (13.7%).

Many people are tired of talking about the pandemic and its effects but it is still hard to avoid when looking at music products import data. While the recovery from the pandemic is still seen in the data, the story of the past few years (and this report, for 2022) is more complex due to supply chain issues and shortages of some products, not to mention the economic conditions mentioned above.

The result for the Acoustic Guitar category, for example, looks like a decline over the past two years from a high point in 2020. This could be a necessary drop off from a peak in 2020 where people were ‘stuck at home’ and buying guitars to play. But units went up in 2021, then dropped substantially in 2022, meaning on average the Acoustic Guitars were much cheaper, although average unit value was still above the pre-pandemic years. Looking at value only, there is a steady decline from 2020 to 2021 to 2022, but 2022 is still well above each of the pre-pandemic years and the 5-year and 10-year averages.

This suggests that Guitars are in decline after a couple of particularly strong years, but that pattern isn’t consistent across fretted instrument categories. Electric Guitar units dropped 19% to the second highest level of the past 10 years, but value has been steadily increasing for each of the past 5 years.

Over the past three years, the main piano & keyboard categories have mixed results in terms of units (Grand Pianos up then up, Upright Pianos up then flat, Digital Pianos up then down, Portable Keyboards down then down) but all increased in terms of value. Last year’s analysis noted that Digital Pianos had reached a low average unit value which was practically unchanged from the previous year; in 2022 the average unit value actually increased substantially

The Wind instrument categories have been moving in slightly different directions over the past three years, while Brass and Orchestral Strings have remained similar or slightly lower in terms of units.

Pro Audio categories are in most cases similar to, or slightly higher than, the previous year. The one exception is Signal Processors, where units are actually slightly lower but value is much higher than the previous year. This largely comes down to a much higher average unit value, partly in units from China but mostly from the US. Taking into account the possibility that there are errors in that category for that year, the result is overall similar to the past two years, almost all categories increased in value.

Percussion was very similar to the previous year in terms of value, overall and in each category. Units were slightly below the previous two years in Drum Kits and Cymbals, and unlike most of these categories Cymbals is below the previous year, 5-year and 10-year averages in units. A higher AUV is saving Drum Kits and Cymbals in particular from lower units; Total Value increased in both.

The value of imports from China was lower in 2022 than 2021, and although that was the second highest figure in that period, the proportion of the market being imported from China has been at a low point for the past two years. Meanwhile, the value of imports from other major sources (other East Asian countries, Europe, South East Asia, North America) all increased.