DALLAS – The Center for Industry Research (CEIR) reports that growth of the exhibition industry during the fourth quarter of 2016 declined. The performance of the industry, as measured by the CEIR Total Index, posted a first modest year-on-year decline of 0.4% (see Figure 1), after 25 consecutive quarters of year-on-year growth. The industry has underperformed the macroeconomy (see Figure 2).
Figure 1: Quarterly CEIR Total Index for the Overall Exhibition Industry, Year-on-Year Growth, 2011Q1-2016Q4
Figure 2: Quarterly CEIR Total Index for the Overall Exhibition Industry Vs. Quarterly Real GDP, Year-on-Year Growth, 2008Q1-2016Q4
“The decline was a temporal set back as economic fundamentals still point to moderate growth for the exhibition industry” said CEIR Economist Allen Shaw, Ph.D., Chief Economist for Global Economic Consulting Associates, Inc.
The decline occurred only in three sectors: Industrial/Heavy Machinery and Finished Business Inputs, Raw Materials and Science and Consumer Goods and Retail Trade. In sharp contrast, Building, Construction, Home & Repair, Communications and Information Technology, Food, and Sporting Goods, Travel, and Amusement all registered robust year-on-year gains.
All exhibition metrics in the fourth quarter posted negative year-on-year losses, except net square feet which gained 1.3% (Figures 3 and 4). Real revenues (nominal revenues adjusted for inflation) posted the largest decline of 1.8%, whereas exhibitors and attendees declined 0.8% and 0.6%, respectively.
Figure 3: Quarterly CEIR Metrics for the Overall Exhibition Industry, Year-on-Year Growth, 2016Q4
Figure 4: Quarterly CEIR Metrics for the Overall Exhibition Industry, Year-on-Year Growth, 2009-2016Q4
In 2016, the Total Index increased by 1.2%, compared to a 3.3% gain in 2015. Net square feet and real revenues had the strongest growth among the four metrics, both gaining 1.8% from 2015 (see Figure 5). Exhibitors rose 1.2%, whereas attendees were flat. Attendees during the last few years have been propelled by a strengthening job market (see Figure 6). In 2016, attendance broke its trending relationship with employment, which was primarily attributable to a substantial decline of 11.2% in Raw Materials and Science exhibition attendees. Low oil prices during 2016 took a toll on oil-related exhibitions. Had the number of attendees of Raw Materials and Science exhibitions stayed the same as a year ago, the growth of attendees for the overall exhibition would have been 1.2%. This, in turn, would have pushed the Total Index to 1.5%.
Figure 5: Annual CEIR Metrics for the Overall Exhibition Industry, Year-on-Year % Change, 2001-2016
Figure 6: CEIR Attendees vs. Nonfarm Payroll Employment
The exhibition performance varied substantially by industry in 2016. The best performing sectors were Food and Building, Construction, Home and Repair, which gained 5.8% and 5.2%, respectively (see Figure 7). On the other end of the spectrum, the weakest sector was Raw Materials and Science, in which the index declined by 7.3%. As mentioned previously, this sector has been plagued by weakness in oil prices that led to declining investment and production levels; however, prices and investment recently have begun to recover. The Industrial/Heavy Machinery and Finished Business Inputs sector registered the second largest decline of 4.5%, which could just be a correction after a whopping 11.0% jump in 2015.
Figure 7: Ranking of the CEIR Total Index by Sector, Year-on-Year % Change, 2016
“We are hopeful this is a temporary downturn and the industry will rebound in Q1 2017,” said CEIR Foundation CEO Cathy Breden, CMP, CAE. “We look forward to the release of the CEIR Index Report in early April which will provide an overall view of 2016 performance and a forecast for 2017-2019.”