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he law of gravity states what goes up must come down. And according to recently released data from the Center for Exhibition Industry Research, trade shows are not immune to that downward gravitational pull. The 2009 CEIR Index, which reports on business-to-business trade shows that occurred in 2008, charts the industry's first decline since 2002. All told, the index reports a 3.1-percent dip from last year's levels.

Despite the aggregate year-to-year drop, the exhibition industry actually grew ever so slightly in the first quarter of 2008, followed by a flat second quarter, and third- and fourth-quarter declines of 6 percent and 5.7 percent. Averaged out over the course of the year, data indicates declines in all four metrics - net square feet, revenue, attendees, and exhibitors - used to measure the industry's overall performance. Not surprisingly, the hardest-hit metrics were attendance (down 4 percent) and revenue (down 3.5 percent).

Following four consecutive years of industry growth, last year's report contained signs that momentum was decelerating. But in 2008, most industry sectors posted negative returns for the year, led by a 9.8-percent decline in the Building, Construction, Home, and Repair sector. The Information Technology sector was the top performer in 2008, showing a 9.8-percent increase for the year, while other positive performing sectors included Raw Materials (up 3.4 percent), Medical and Health Care (up 1.3 percent), and Industrial (up 1.1 percent).

According to the report, all indications point to continued declines for the industry. The National Association for Business Economics, a panel of 47 leading economists, has predicted that the U.S. economy will not recover until the second half of 2009 at the earliest. And former Federal Reserve Chairman Alan Greenspan stated that the current economic downturn would ultimately be the longest and deepest recession since the 1930s. Leading economic indicators show that the economy is still shedding jobs, consumer confidence continues to decline, and the troubles in the housing market have ongoing, broad economic ramifications. And in the words of Greenspan, a recovery in housing is "necessary" to end the financial crisis in the United States.

CEIR predicts the exhibition industry may not see growth until the second quarter of 2010. However CEIR also reports that some sectors - including the oh-so-critical Building and Construction sector - of the exhibition industry are positioned for more immediate growth due to spending provisions set in the government's stimulus packages. For example, billions of dollars are earmarked for projects in education, renewable energy, construction, infrastructure, and technology.

As we look to the future, CEIR offers some insight based on eight years of accumulated data. According to the organization, net square feet and the number of exhibiting companies are leading indicators of recovery and contraction. Furthermore, three sectors (Professional Business Services; Consumer Goods and Retail Trade; and Building, Construction, Home, and Repair) are guideposts for the overall industry. As go these sectors, so goes the industry as a whole.

The following survey excerpts represent a broad analysis of the data, as well as insights into each of the 11 industry sectors. The full 80-page is available through CEIR's Web site, www.ceir.org.

Metrics Matter

Each year, CEIR tracks the following metrics to identify trends and industry growth or contraction. The definitions below will help you understand these critical barometers of the exhibition industry's overall performance.

The number of professionals or buyers attending an event. For business-to-business exhibitions, this number excludes non-business attendees such as exhibiting company personnel and friends and family.
The number of companies and other organizations occupying exhibit space at an exhibition. This includes exhibit space traded for in-kind services and other non-cash considerations.
Net Square Feet (NSF):
The amount of exhibition space sold for revenue or in-kind services (does not include aisle space or meeting rooms).
The gross exhibition revenue generated from all sources, including the sale of exhibit space, conference fees, advertising, sponsorships, etc.
The non-weighted average of the four aforementioned component values - net square feet, exhibitors, attendance, and revenue.  

Quarterly Report

The following graph shows the quarterly results for 2008, as compared with quarterly results from the past eight years. The number 100 represents the original benchmark, or index, as established in the year 2000. As you can see, the industry was primed for another record year following the first quarter of 2008, with gains in exhibitors and NSF offsetting declines in attendance and revenue. A dip in the second quarter left the industry flat, compared to the second quarter of 2007. Then, a third-quarter plunge of 6 percent - the sharpest third-quarter loss since 2001 - left the industry well below levels reported in 2007, 2006, and 2000. And despite a comparably strong finish in the fourth quarter, the industry closed out the year on a four-year low.

Overall Exhibition Industry

With last year marking the industry's first decline since 2002, the graph below shows how each of the annual aggregate CEIR metrics have ebbed and flowed since 2000. Again, the number 100 represents the original benchmark, or index, as established in the year 2000. Scores above 100 indicate growth; scores below 100 indicate performance that fell below the levels measured in 2000.

Sector Syntax

Below, each of the sectors' respective sub-sectors are listed to help you identify the one that aligns with your business.

Professional Business Services: accounting, advertising and marketing, architecture, audio visual, banking, business, engineering, financial and legal, insurance, plant engineering and operations, printing, safety, security
Sports, Travel, Entertainment, Art, and Consumer Services: art, amusement, beauty and personal care, boats, fishing, funeral industry, hotels and resorts, real estate, recreational vehicles, religious, rental and leasing, sporting goods and recreation, toys and hobbies, travel
Food: food and beverage, food processing and distribution, restaurant and food service
Government, Public, and Nonprofit Services: associations, education, fire, government, libraries, military, police
Building, Construction, Home, and Repair: housing, home economics, building and construction, home furnishings/interior design, landscape and garden supplies, stores and store fittings, woodworking
Industrial/Heavy Machinery and Finished Business Inputs: heating, air conditioning, refrigeration, manufacturing, metal working, coatings technology, packaging, robotics, waste management, welding
Communications and Information Technology: communications, computers, electronics, radio, television, cable, telephone
Medical and Health Care: dental, industrial, medical and health care, nursing, pharmaceuticals, veterinary
Raw Materials and Science: agriculture, ceramics and glass, chemical, energy, horticulture, forest products, mining, ocean science, paint, paper, petroleum, oil and gas, plastics, pollution control, science, textiles, water, wire
Transportation: aerospace and aviation, railroads, automotive and trucking, physical distribution, transportation

The Good News

Four industry sectors posted total-show performance gains in 2008, despite the tough economic conditions: Industrial/Heavy Machinery and Finished Business Inputs, Communications and Information Technology, Medical and Health Care, and Raw Materials and Science. But the year's top-performing sector was the IT sector, increasing 9.8 percent. Driven by 10.4- and 14.7-percent gains in attendance and revenue, respectively, the results mark that sector's fourth consecutive year of growth.


Compound Annual Growth Rate (CAGR) is a measure of the average growth over a period of time, which in this instance is nine years. It illustrates the rate of momentum the industry has seen since the year 2000, as averaged out over time (versus the incremental changes seen over shorter durations). In other words, if the ups and downs of the exhibition industry's performance were smoothed out over the past nine years, the average annual growth rate since 2000 would equal 1.8 percent, despite the troubling economic conditions of 2008.

GDP and the Industry

According to CEIR, the exhibition industry tends to track fairly well with Gross Domestic Product, as shown in the following chart, which displays year-over-year percentage change in GDP (represented in black) versus year-over-year percentage change in the exhibit industry (represented in red).
Sector-to-Sector Comparison

How does your industry sector stack up to the others? The bar graph shows each sector's total-show performance, which is an average of the four metrics CEIR tracks. The chart below it illustrates the increases and decreases found when comparing 2007 and 2008 sector results for each of the individual metrics.

Industry Performance Overview

When examining the overall exhibition industry, all four metrics that CEIR tracks decreased in 2008, led by a 4-percent decrease in attendees and a 3.5-percent decrease in revenue. The chart below indicates the degree to which each metric dropped when compared to the levels recorded in the 2008 CEIR index.
About the Research

The CEIR Index is designed to be representative of the entire universe of business-to-business exhibitions. Exhibitions are defined as any event with at least 3,000 net square feet of exhibit space and 10 or more exhibiting companies. Veris Consulting collected the data on 10,000 qualifying business-to-business events via surveys. The data was then entered into a database and reviewed for completeness, data quality, and reasonableness. The data was also reviewed in the aggregate to ensure there was a statistically significant sample in each of the 11 industry sectors. For complete survey methodology, visit www.ceir.org.

  Net Square Feet: 2.0%  
  Exhibitors: 2.6%  
  Attendees: 4.0%  
Revenue: 3.5%
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