Art Basel and UBS publish the 2nd Global Art Market Report, noting exceptional growth across market sectors.
Prepared by Dr Clare McAndrew, the report details Asia’s expansion amongst gains in global wealth, art fairs and online sales. Art Radar reviews the document’s key findings.
Art Basel and UBS have recently published the second edition of their collaborative Global Art Market Report, which presents a comprehensive analysis of the art market in 2017. Dr Clare McAndrew, Founder of Arts Economics, has compiled the several-hundred-page document, detailing trends across varying art market categories.
A continuation of McAndrew’s extensive research into this field, the report begins with an analysis of global sales data, including the key benchmark statistics on global transaction values, volumes and geographic market shares. It delves deeply into specific sales figures, highlighting a sizeable uplift in the auction and dealer sectors, which remain at the top end of the market. McAndrew, however, points to a mixed overall market performance where online sales, art fairs, gallery openings and closures, and art world employment figures were scattered across the board.
Following two years of declining sales, 2017 saw the market turn a corner with increasing sales in both dealer and auction spheres. McAndrew states that the global art market grew by 12 percent this past year, reaching an estimated USD63.7 billion, with the United States retaining its position as the largest market and China narrowly overtaking the United Kingdom for second place. Value gains were motivated by sales at the highest end of the market, topped by record prices in the auction sector.
The greatest takeaway from this section is, perhaps, its emphasis on the growing influence of China in global market sales. The report mentions that the three largest global markets – the United States, China and the United Kingdom – accounted for 83 percent of total global sales by value. China took up 21 percent of this figure, advancing above the United Kingdom for the first time in history. This is following a 14 percent rise in the Chinese art market from 2016, equalling USD13.2 billion more than the previous year.
In conjunction with the growth in China’s art market, the document reports growth across the entire Asian continent and predicts a continuation in years to come. When combined with other markets such as Japan, South Korea, India and Indonesia, Asian sales accounted for a 23 percent of global share in 2017. Although this is still significantly less than the US, at 42 percent, and the EU, at 33 percent, strong wealth dynamics in Asia and energetic local markets suggest that its share could increase in the near future. As the report states,
While some of the larger mature economies such as the US are operating at what might be considered full capacity, there is still significant room for continued longer-term growth in emerging economies. Despite its slowdown in recent years, China remains one of the world’s fastest growing nations, and in 2017 saw a slight increase in the rate of growth after seven years of decline, boosted by easier fiscal policies and financial conditions, and a supportive global context. Many of the other export-focused economies in Asia, such as Taiwan and South Korea, also experienced increased growth rates.
Interestingly, besides works of art which sold for less than USD1,000, all segments up to USD1 million have shown negative annual growth rates and declined in value between 2007 and 2017. In contrast, the market over USD1 million has grown, with the biggest increases at the very highest end, with the total value of works sold for over USD10 million increasing by 148 percent during that past ten years. This is what many in the industry refer to as the ‘superstar effect’, where few well known artists attract the most attention. In an interview with Art Basel’s Executive Editor Jeni Fulton, McAndrew comments on this phenomenon:
Buying a work of art is a very large, infrequent, high-risk purchase for many people, and a way to reduce this risk is to look at what everybody else is doing, and consume what others are consuming. This creates a focus around a few artists at the high-end. As it becomes more concentrated, new buyers start to think that that’s all the art market is.
The report also details sales of Post War and Contemporary art, which reached a total of USD6.2 billion in 2017. This accounts for 46 percent of auction values, followed by Modern art at 27 percent. Three American artists head the list of the top selling Post War and Contemporary practitioners – Jean-Michel Basquiat, Andy Warhol and Cy Twombly – followed closely by the Chinese-French artist Zao Wou-Ki. The Chinese oil painter Cui Ruzhuo also made news this past year, his piece Twelve Screens of Finger Ink Landscape pulling in USD35.7 million at a Poly China auction, the most expensive non-Western piece sold in 2017.
Exhibitions and Art Fairs
The art fair concept, McAndrew notes, is still developing in Asia. At Art Basel Hong Kong, the public has come to think about art as investment. As fairs have become an important cultural communication tool in recent years, Asian collectors have become more interested in Western art, and, conversely, Western collectors found more interest in Asian artists.
Beyond this, despite the increased use of digital communication, the physical exhibition of art remains the key medium through which most art becomes known. Exhibitions, whether in a gallery, institution or art fair, are the principal venue for the exchange of cultural meaning and the focal point for establishing value around artists and their specific works. Fairs and exhibitions are also the primary methods by which art is introduced and promoted to international collectors. 2017 saw a packed schedule of exhibitions, art fairs, auctions and related events where new markets were created, budding reputations were established, research flourished and the monetary value of artwork was enhanced.
In 2017, the online art market reached an estimated new high of USD5.4 billion. This represents 8 percent of the value of global sales, up 72 percent from the preceding five years. Online sales have been a key method to access new buyers, with dealers reporting that 45 percent of their online buyers were new to their businesses in 2017. Auction houses also focused on online sales as key way to generate new buyers; McAndrew holds that 41 percent of those buying online at second tier auction houses were new buyers.
In recent years, investors have poured large sums of money into online art auction houses such Paddle8, Artspace, Saatchi Online, and the like, while the industry giants like Christie’s and Sotheby’s have also turned their attention to online auctions. Studies performed by these institutions suggest that one of the main reasons collectors are interested in online marketplaces is because most buyers are increasingly interest in the fixed-price options that allow them to avoid the pressures and pit falls of live auctions.
One of the most applicable chapters in the report sums up the economic impact – namely, the ancillary expenditure and employment – that the art world has fostered over the last year. The market directly employed around three million people in 2017, with approximately 310,685 businesses operating in the global art, antiques and collectibles sectors. The report estimates that the global art trade spent USD19.6 billion on a range of external support services directly linked to their businesses.
On the extensive collaboration that has brought the second edition of the Art Basel and UBS Global Art Market Report, Paul Donovan, Chief Economist of Global Wealth Management, UBS said:
The performance of today’s growing and globalised art market is a fascinating reflection of wider economic trends. […] Collecting is a passion that we share with many of our clients. Alongside our own exclusive art services, this collaboration with Dr Clare McAndrew and Art Basel is a natural fit for our ongoing commitment to the research and analysis of markets and economic data.
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- The Leonardo Effect: ArtTactic’s Raw Facts Auction Report 2017 – key findings – February 2018 – the London-based analytics company ArtTactic has released its 2017 Raw Facts Auction Review report on the global auction market
- A find balance: ArtTactic’s South Asian Art Market Report 2017 – key findings – January 2018 – ArtTactic releases their annual South Asian art market report, noting an exciting upturn in the region’s sales of contemporary art
- artnet Global Chinese Auction Market Report 2016: key findings and highlights – September 2017 – In collaboration with artnet, the China Association of Auctioneers releases the Global Chinese Auction Market Report for 2016
- Art Basel and UBS Global Art Market Report 2017 – key findings summary – April 2017 – Art Basel and UBS Global Art Market Report confirms highest global net worth in the Asia-Pacific region for the first time in history
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