Third quarter statistics reported by the Hearing Industries Assn. (HIA) indicate that hearing instrument sales were down 5.18% compared to last year. Overall, 29,000 fewer hearing aids have been sold in 2001 than in 2000, a 2.0% change. When increases in VA purchases for this year are considered, non-government purchases of hearing instruments are down by 57,000 units, a 3.9% decline. As with the economy as a whole, anecdotal reports from hearing instrument manufacturers, suppliers and dispensers alike support the notion that the hearing industry has been experiencing a recessionary period of its own for over a year. Starting in April 2000, quarterly increases in net sales of hearing aids have not exceeded 2%.

However, there are some reasons to hope for a turn-around. Market analysts have pointed out that, historically, U.S. hearing instrument sales show little correlation with GDP growth and other economic factors. They contend that growth in the market is influenced more by factors such as the FDA and highly public figures (e.g., Presidents Reagan and Clinton) procuring hearing aids. Recessions and stock market fluctuations are less likely to affect seniors, whose lives are less dependent on the current availability of jobs and whose incomes are heavily weighted toward fixed income investments such as bonds. In fact, it can argued that the last time we had a recession (around the time of the Gulf War), the hearing instrument market did quite well.

Another factor that has historically impacted the hearing instrument market is the introduction of new products. In the past year, several new hearing aids have been introduced (many recently at the UHA Congress in Germany), and these often have the effect of generating excitement—first among dispensing professionals, and then, through advertising and word-of-mouth, to consumers. In particular, a number of DSP hearing instruments have been introduced that may increase advertising and consumer interest in the months to come.

The increase in market share of these high performance products, particularly DSP aids, may be a double-edged sword for sales. On one hand, the products —along with features like advanced feedback reduction and directional microphone capabilities—should eventually increase customer satisfaction due to their performance; on the other hand, their higher cost may negatively affect repurchase times, and consumers may not yet fully see the cost-vs-value benefits of the aids. In the third quarter, HIA statistics indicate that 59% of all hearing instruments sold were high performance aids, with programmables accounting for 30% of the market and DSP 29%. This compares with with 26% and 13% (respectively) in 1999. Programmable analog instrument market share has remained constant for almost a year. Meanwhile, DSP instrument lines are moving into price ranges traditionally dominated by programmable instruments, further widening their appeal, accessibility, and potential for greater perceived value among consumers.

So despite the nation’s hangover from almost a decade of unparalleled economic growth, there are some potential bright spots. And it all starts with promoting hearing care products and services to the 28 million people who need them.

Karl Strom
Editor-in-chief