There are a few features of the planting site that are causing the plant stress, predisposing it to pest issues and potentially root damage. Located next to a brick wall, a shrub will be vulnerable to extra heat and reduced air circulation, and the nearness of a roof downspout outlet can deposit too much water in the root zone for the tolerance level of azaleas. Azaleas appreciate soil moisture during stretches of dry weather, but must have good drainage to thrive and they do not like to stay wet. The prior pruning that sheared the branch tips is also predisposing the shrub to issues, so we recommend not pruning it so drastically, and if you need to restrain it size, it would be better moved to another location in semi-shade that can handle its mature stature without pruning.

The foliage that is pale and almost silvery is damaged by either Lace Bug (most likely) or Spider Mites (or both). Lace Bug is a very common azalea insect pest and it thrives in areas with built-up heat or too much afternoon sun for the preferences of the azalea, which grow best in semi-shade. Treatment options are included in the entry for lace bugs on our azalea diagnostic page.

The white residue is hard to see clearly, but it is not fungal. It is probably the waxy body covering of probably Azalea Bark Scale, which also might explain the branch dieback where it is concentrated. Scale management can be difficult, but pruning individual branches back is one way to remove isolated infestations.

To improve the plant's appearance, a drastic pruning might actually be the simplest approach, even though it will take a few years to recover and flower well again. (Plus, it will help remove the foliage damaged by lace bug as well as the vast majority of the scale insects.) This would involve pruning back all branches down to perhaps a foot off the ground, and letting regrowth fill back in. This can be done now, or you could wait until just after flowering next spring (late April or into mid-May, more or less).

Miri