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Hearing Aid Sales in 2022 Flatten Due to Economic Headwinds
Overall U.S. hearing aid sales were up by about 1%; commercial units fell by 0.6% while VA units increased by 7%)
Veröffentlicht am Feb 27, 2023
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In 2022, U.S. hearing aid sales increased nominally by 0.8% to 4.77 million units, compared to the post-pandemic year of 2021 when pent-up demand caused sales to surge by 37% (Figure 1). When looking at both the commercial and VA markets, about 36,000 more hearing aids were sold in 2022 compared to 2021, with 22,000 fewer units sold in private practices and the commercial sector and 58,000 more units in the U.S. Department of Veterans Affairs (VA), according to statistic generated by the Hearing Industries Association (HIA), Washington, DC.
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Given the very strong comparison base from 2021 and significant macroeconomic headwinds, the U.S. hearing aid market in 2022 was still relatively resilient (Figure 2): strong net unit sales in the first quarter (Q1, an 8.3% increase) were followed by progressively worse sales in Q2-Q4 compared to the same periods in 2021 (-0.6% to -3.2% decreases).
Net commercial sales of hearing aids—including those of private practices and mass merchandisers—decreased modestly by -0.6% in 2022, following a substantial 36.6% increase in 2021. Commercial unit sales were up by 6.3% in Q1, but then fell progressively by -1.0%, -3.2%, and -3.7% in the last three quarters, compared to the same periods in 2021. The last time we saw three consecutive quarters of negative commercial unit sales was almost 15 years ago during the 2008 stock and housing market meltdown.
Net units dispensed by the VA and other government agencies during 2022 increased by 7.2% in 2022, after a 50.4% increase in 2021 (Figure 2). The VA saw unit increases of 18.5%, 1.5%, and 11.6% in the first three quarters, but dipped into slightly negative territory (-0.81%) in Q4.
When viewed next to each other, both the commercial and VA markets have experienced steady growth during the past 15 years (2008-2022), with average sales increases of 4.7% and 7.6%, respectively (Figure 3). The total average U.S. annual percentage growth rate is 5.1% during that same period.
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In last year's market analysis, I predicted higher-than-average hearing aid sales (>5%) for 2022 "barring an uptick in Covid-19, stock market upheaval, recession, military conflicts with Russia or China, political turmoil during the mid-term elections, or some other unforeseen adverse event." As noted above, U.S. unit sales were relatively flat with a -0.6% decline in the commercial market and a 7.2% increase for the VA, for a 0.8% overall increase.
Although not fitting the technical definition of a recession, 2022 brought terrible economic news—especially for seniors who rely on fixed income sources and returns from retirement funds. The S&P 500 (large caps) finished down by 19.4%, the Russell 2000 (small caps) dropped by 33.1%, and 2022 was the worst-ever year for holding bonds. Add to that was a 9.1% inflation rate—a level not seen since the Reagan years—and rising interest rates. Although the coronavirus restrictions for the general population were lifted by the first quarter, an outbreak in China affected the worldwide economy, as did the war in Ukraine. In short, there were plenty of reasons for seniors and other potential hearing aid buyers to sit on their wallets.
But, given all this, hearing aid sales were pretty resilient. I’ve argued before that the hearing aid market has a history of doing okay during recessions and economic downturns. It's not recession-proof, but it is recession-resistant. It appears this trait held true for 2022 as well.
The major hearing aid manufacturers appear to be relatively bearish about what 2023 will bring, with predictions of the global market increasing by 1-3% in unit volume and average sales prices (ASPs) slipping by 1-2%. Much of it will hinge, of course, on the economy—particularly inflation's effect on seniors—as well as the continuing war in Europe and the associated macroeconomic and geopolitical hardships and risks it brings.
Concentrating on the hearing healthcare industry, there are at least six other items that will probably continue to make headlines during 2023:
With some exciting new products being launched this spring, increasing links between hearing health and cognition, and the new OTC hearing aid market, sales of hearing aids should continue to grow at their 4-6% rate well into the future. What's in store for 2023? A 5% increase in 2023 sales would push U.S. hearing aid unit sales over the 5-million unit mark for the first time ever. Although the year's first half may start slow, this “industry first” is still a possibility.
Karl Strom ist der Chefredakteur von HearingTracker. Er war Gründungsredakteur von The Hearing Review und berichtet seit über 30 Jahren über die Hörhilfenindustrie.
