CEOs in the US gaming industry maintain a positive business outlook for 2022, and are optimistic about the industry’s continued growth and recovery from the Covid-19 pandemic, according to a new report released on Wednesday.
The American Gaming Association’s (AGA) Gaming Industry Outlook, presented in partnership with provider of credit ratings Fitch Ratings, found more survey respondents (67%) rate the current business situation as “good” than six months ago (54%), while none describe it as “poor.”
Meanwhile, four in ten CEOs expect the industry’s business climate to improve over the next two quarters, compared to 13% that expect business conditions to worsen. The results were celebrated by the AGA, with the trade association also showing confidence in the future of US gaming.
“Gaming executives are signaling confidence in our continued recovery that is in line with record-setting consumer demand for gaming,” said AGA President and CEO Bill Miller. “I’m optimistic that 2022 will see the return of a true sense of normalcy for gaming.”
However, while most gaming CEOs are generally positive about the industry’s economic outlook, they have also reported macroeconomic impediments to business growth. The top concerns include supply chain issues (75%) and inflationary and interest rate concerns (67%). Labor shortages follows at 54%, an issue that has already been reported in some states.
Notably, Covid-19 and demand for meetings and events are no longer among the top five concerns for gaming CEOs, proving they believe the industry is finally able to leave the pandemic behind. However, players in the sector are still facing a number of challenges, which are common to businesses nationwide.
“Like businesses across the country, our industry is grappling with supply chain, labor and inflation challenges that, if left uncontrolled, could dampen our continued growth and economic outlook,” warned Miller.
🎰 NEW: AGA’s Gaming Industry Outlook shows that gaming CEOs are optimistic for gaming’s continued recovery and growth.
Find report highlights below ⬇️ and read the release here ➡️ https://t.co/SsGanXlU46 pic.twitter.com/dFsTDQcm7p
— American Gaming Association (@AmericanGaming) April 20, 2022
The Gaming Industry Outlook includes two separate indices, the AGA explains. These are the Current Conditions Index and the Future Conditions Index.
Despite an all-time high commercial gaming revenue through the first two months of 2022, the Current Conditions Index of 93.5 reflects “a slowing in casino gaming-related economic activity” compared to record industry growth in Q4 2021. The index shows that the industry has grown at an annualized pace of about 16.5% over the last three quarters.
Meanwhile, the Future Conditions Index stands at 101.1, “reflecting anticipated expansion of casino gaming-related economic activity over the next six months” at a modest 1.1% annualized rate – this implies a return to normal industry growth after a year of tremendous industry expansion from pandemic-era lows in 2020.
Further findings of the study show a majority of gaming CEOs surveyed (79%) expect the pace of wage and benefit growth to increase over the next three-to-six months, while 50% expect the pace of hiring to also increase.
The new @AmericanGaming Industry Outlook is out and presented in partnership with @FitchRatings. Gaming CEOs are more positive about the current business climate than there were in the fall, but slightly less optimistic that it will continue to improve over the next 6 months.
— David Forman (@dp_forman) April 20, 2022
Among gaming operators, 53% said they planned to invest more capital than normal in hotel facilities in the coming year, while about one-third plan to invest more than normal in slots on the casino floor (27%) and brick-and-mortar sportsbooks (33%).
Meanwhile, suppliers reported increased bullishness for sales growth over the next six months: 100% of respondents expect sales of gaming units for new or expansion use to rise; 86% expect sales of gaming units for replacement use to rise; and 71% expect the pace of their capital investment to rise.
The Q1 2022 survey was conducted between March 21 and April 1, 2022, and a total of 24 executives responded. These include executives at major international and domestic gaming companies, tribal gaming operators, single-unit casino operators, major gaming equipment suppliers, and major iGaming and/or sports betting operators.
The AGA Gaming Industry Outlook is prepared biannually by economic forecasting and econometric analysis firm Oxford Economics. Its aim is to provide “a timely measure of recent industry growth and future expectations.”
Original article: https://www.yogonet.com/international/news/2022/04/20/62311-aga-us-gaming-ceos-keep-positive-business-outlook-for-2022–confident-in-recovery
