|f the sky fell in 2008, the stars rained down with agonizing hellfire in 2009. At least that's the story depicted in the most recent report issued by the Center for Exhibition Industry Research (CEIR). The 2010 CEIR Index, which reports on business-to-business trade shows that occurred in 2009, marks the exhibition industry's second consecutive year of decline. Averaged out over the course of the year, data indicates shortfalls in all four metrics - net square footage, revenue, attendees, and exhibitors - used to measure the industry's overall performance. But we're not talking a slight dip in attendance or net square footage. We're talking the largest year-to-year decline in recorded history.
"The Great Recession of 2008 and 2009 has been described as the most significant economic downturn since the Great Depression that began in 1929," says Carrie Freeman Parsons, vice chair of Dallas-based Freeman and 2010 CEIR chairperson. "Although the exhibition industry as we know it today did not exist some 80 years ago in the United States, it is hard to imagine that it would have experienced worse declines than those of the past two years."
Prior to 2009, the largest single-year decline ever recorded
by the U.S. exhibition industry was a drop of 3.1 percent in 2008. The catastrophic plunge reported for 2009, however, is a whopping 12.5 percent - more than four times larger. In fact, all 11 industry sectors measured by the CEIR Index declined in 2009, with the Consumer Goods and Retail Trade sector taking the largest hit: a 16-percent overall free-fall.
Following seven consecutive quarters of decline, the industry did manage some much-needed re-growth in the fourth quarter of 2009. But that growth wasn't significant enough to offset the decreases experienced in the first nine months of the year. And the CEIR Index cautions that the industry is unlikely to see marked recovery in the near future.
The outlook for 2010 is tempered but cautiously optimistic. In a nutshell, CEIR claims the industry is poised to launch a recovery, but anticipates that overall performance will remain hampered by the Great Recession for the bulk of this year. However, CEIR expects that as spending from the American Recovery and Reinvestment Act (ARRA) increases in 2010, and as the government responds with additional stimulus programs, several key sectors will be positively impacted. "For example, billions of dollars are earmarked for projects in education, renewable energy, construction, infrastructure, and technology," states the report.
Further optimism is offered up in the form of a historical precedent: The exhibition industry has rebounded well following previous recessions, though its recovery has lagged behind that of the overall U.S. economy. According to CEIR, "It took approximately three quarters for the exhibition industry to start growing again following the end of the 2001 recession. However, the 2001 recession was significantly shallower and briefer. With economic forecasters predicting slow growth in 2010, the exhibition industry may not see year-over-year growth until the fourth quarter of 2010."
As we continue to look to the future, CEIR offers some insight based on 10 years of accumulated data. According
to the organization, there are three key
trends that are worth watching as potential predictors of what lies ahead: The number of professional attendees at trade shows and exhibitions is a leading indicator of recovery and decline. Two other metrics - net square feet (of exhibit space sold) and revenue - are parallel lagging indicators. And three industry sectors (Professional Business Services, Consumer Goods and Retail Trade, and Building, Construction, Home, and Repair) have historically acted as "guideposts" for the overall industry. Since 2000, the industry has followed the same pattern as these sectors with regard to year-over-year performance.
"The CEIR Index has grown from an interesting read at its beginning 10 years ago to an important barometer for the health of the exhibitions industry," says Galen Poss, partner at G2 & Associates LLC, a Washington, DC-based opinion- and market-research firm. "Based on the Index's most recent results, it would appear the industry has reached a bottom and should show marginal improvement over the next 12 to 24 months."
The following survey excerpts represent a broad analysis of the exhibition industry, as well as insights into each of the 11 individual industry sectors. The full 88-page 2010 CEIR Index is available through CEIR's Web site, www.ceir.org.