Unfortunately, the global economic crisis was not biased when it struck industries across the world. Driven by high-rolling, high-ego aficionados, the art industry was impacted more than one would have expected. With artworks ranging from just $500,000 to well into the millions of dollars, buyers who take interest in these unique items also felt the burn from the instability of the world markets and significant decrease in personal wealth. As a matter of fact, in 2007 the art market was valued at $65 billion, down from $113 billion just five years before. Today it is estimated to be as low as $50 billion.
Interestingly enough, the art world has been quietly expanding. Sotheby’s, a leading art broker, reported that their major customers came from just 36 countries around the world. In 2007, the number of countries went up to 58 and the number of total customers tripled! Furthermore, the leading markets in the purchase of expensive art is changing. China has risen to the #3 position, pushing France down one notch.
Although the art industry has taken huge hits in the past as a result of more conservative spending habits by the rich, what does the future hold? The overall size of the market is slowly regaining, but more importantly, it is expanding globally. Sotheby’s is one of the first art brokers to focus on “emerging art markets” such as Russia, Asia and the Middle East.
So what does all this mean to those of us who don’t make regular purchases of art that is valued into the millions of dollars? Although there are many leading indicators of the world economics, it is interesting to view an economic recovery based on the purchasing habits of people who hold significant wealth. Not only is there more confidence in the markets, as displayed by increased purchases of fine art, but also there is a shift in the countries where these purchases originate.
To me, the fine art industry demonstrates two insights into the current world economy: 1) The economic recovery is in fact underway, and 2) when the recovery is complete, our global economy will be profoundly changed in the distribution of wealth around the world.