U.S. technology industry sales and shipments will drop -0.2% ($1 billion) to $503 billion in 2022 according to a new forecast from the Consumer Technology Association
(CTA)®. This projection is down from 2021’s record high growth of 11.6%. While sales and shipment volumes decline, revenues through 2023 remain above pre-pandemic levels.
Executive Summary: CTA U.S. Consumer Technology One-Year Industry Forecast (July 2022)
CTA projects a return to pre-2020 levels of technology sales after 2021's historic purchasing surge led to a record $504 billion in U.S. retail revenue. For the first time since 2009 the industry will experience negative sales and shipment growth.
“In the face of inflation and a possible recession, savvy U.S. companies will stay competitive by transforming themselves to navigate a volatile market,” said Gary Shapiro, President and CEO of CTA. “Tough times spur innovation. Companies that show novel approaches to rethink supply chains, production, and their products and services will succeed at increasing productivity.”
Inflation and recession may contribute to the dip, but CTA believes the U.S. technology industry will play a crucial role in mitigating the economic effect of a recession through productivity gains spurred by innovation. Research shows that increased productivity allows an economy to produce more for the same amount of labor.
Technology Sectors Driving Growth in 2022
Despite the overall decrease for the remainder of 2022, CTA projects a range of technology sectors will drive growth into 2023, including:
Supply Chain Challenges
- 5G/Smartphones: Smartphone revenue will grow by $2.175 billion (up from $74.5 billion in 2021). 5G hardware is being broadly deployed in homes, businesses and public spaces. 5G handsets will make up 73% of smartphones in 2022. By 2023, 5G handsets will make up 84% of smartphones (+11% Year-over-Year).
- Gaming: Gaming revenue will increase by 1% to $51.7 billion in 2022, and $52.4 billion in 2023 (+1% YoY). Pent-up demand for next generation consoles remains strong and the growth of subscription gaming services provides a new source of recurring revenue.
- Smart home: Hardware revenue for smart home devices will see 3% growth in 2022 reaching $23.8 billion. As energy costs continue to rise, energy efficient devices offer consumers cost-saving solutions for lighting, thermostats and smart outlets.
- Health tech: The U.S. health technology industry will reach $13.4 billion in sales representing 4% growth YoY. The pandemic began a long-term trend toward the greater adoption of health technology by consumers. Meanwhile, smartwatches and fitness trackers feature more capabilities and longer battery life.
Supply chain disruptions create challenges for the U.S. tech industry, which spurs innovation and long-term changes that improve future industry efficiency. By restructuring domestic supply lines to reduce reliance on unpredictable foreign suppliers and focusing on innovation that improves supply chains, businesses can learn from the past two years to decrease manufacturing costs.
CTA member companies believe these challenges will remain into 2023. A May 2022 CTA member survey showed:
- 58% of respondents believed semiconductor shortages would continue for a year or longer
- 50% believe shipping and logistics disruptions will continue for a year or longer.
Innovation from American technology companies is essential to our resurgence. U.S. lawmakers must uphold policies to keep America’s competitive technology edge and address domestic supply chain challenges.
Improved public policy for shipping regulations like the recently passed CTA-backed Ocean Shipping Reform Act
eliminates harmful practices by ocean carriers that undercut America’s economic recovery. Policies encouraging high-skilled immigration and limiting frivolous lawsuits will strengthen a technology industry that is ready to drive economic recovery.
Providing key insights since 1967, the biannual U.S. Consumer Technology One-Year Industry Forecast
is CTA’s definitive report on current and near-term sales. The forecast covers electronic products and associated accessories or services from hundreds of companies that facilitate innovation, productivity, communication and entertainment.
Survey data is compiled via proprietary member company statistics, interviews and surveys. Aggregated responses are adjusted using year-to-date trending data from other quantitative and qualitative inputs, such as U.S. trade and tariff data. An analyst-led peer review finalizes the data and ensures integrity and consistency.
Consumer Technology Association:
As North America’s largest technology trade association, CTA® is
the tech sector. Our members are the world’s leading innovators – from startups to global brands – helping support more than 18 million American jobs. CTA owns and produces CES® – the most influential tech event in the world. Find us at CTA.tech
. Follow us @CTAtech