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The downturn has begun to effect the Exhibition and Trade show industry, according to CEIR Index, a new report from Center for Exhibition Industry Research. In 2008, the exhibition industry experienced its first annual decline since 2002, decreasing 3.1 percent compared to 2007, led by declines of 6 percent and 5.7 percent in the third and fourth quarters of 2008, respectively., according to the CEIR Index, a leading measurement of exhibition industry performance. However, since the start of the Index in 2000, the industry has grown positively, at a compound annual growth rate  of 1.8 percent.

“We had been keeping our fingers, but these numbers were not a shock,” said Cathy Breden, Executive Director, CEIR. “The decline was much more profound than we expected and goes across every sector of business.”

The decline, which seemed to worsen as the year went on, reflects the downturn in the economy last year. “By the end of ’02 and ’03, there were indices that the economy was picking up. All indices show that the industry started going down in 2007, like the economy at large. We’re not sure where the bottom is, we’re in uncharted waters right now, but everything indicates this decline will probably last longer."

Of the 11 industry sectors measured by the CEIR Index, only four grew in 2008: Information Technology (+9.8 percent); Raw Materials (+3.4 percent); Medical and Healthcare (+1.3 percent); and Industrial (+1.1 percent). On the flip side, the Building and Construction sector saw the largest decline for the year, of (9.8 percent). Other sectors that underperformed the overall exhibition industry in 2008 included: Consumer Goods (-7.0 percent); Transportation (-5.9percent); Professional Business Services (-5.1 percent); and Government (-3.9 percent).

While the new figures may be cause apprehension—an emotion being felt by everybody these days with the bad economic news dominating headlines, Breden insists they are not yet cause for alarm. “I don’t think we are scared, but I do think we’re very concerned. The value for business of exhibitions has been proven, and as the overall economy improves—when consumer goods sales pick and banks start loaning again, exhibitions will begin to increase.”

The exhibition industry tends to track fairly well with Gross Domestic Product (GDP). In 2008, the growth rate for real GDP was 1.1percent. During the first quarter of 2008, GDP grew 0. percent, but the second quarter of 2008 was the last for GDP growth, at 2.8 percent. Second quarter GDP was helped by the $168 billion Federal tax rebate, which spurred consumer spending and drove economic growth. GDP receded (0.5 percent) in Q3-08, and then declined sharply in Q4-08, by 6.2 percent. The 2008 quarterly results for the overall exhibition industry reflected the pattern of GDP, as the industry grew 0.5 percent in the first quarter of the year, was flat in the second quarter, and then declined in Q3 and Q4, at rates of 6.0 percent and 5.7 percent, respectively.

“Some sub-sectors of the exhibition industry are better positioned than others for more immediate growth, due to spending provisions in the economic stimulus packages,
Breden added. “For example, billions of dollars are earmarked for the education, healthcare, energy, construction, technology, and infrastructure markets.”

All four key exhibition industry metrics declined in 2008, versus 2007: Net Square Feet (-2.0 percent); Exhibitors (-2.6percent); Attendance (-4.0 percent); and Revenue (-3.5 percent). And, only the Information Technology and Raw Materials sectors showed gains across all four metrics for the year. According to CEIR, after eight years of data collection via the CEIR Index, this is the data to monitor:  Net Square Feet and Exhibitors -- these two metrics have proven to be leading indicators, of both recovery and contraction and Attendance and Revenue -- these two metrics have shown to be lagging indicators and should not be relied upon by executives for signs of recovery. “Exhibition organizers should take the data points, compare it to their performance last year,” said Breden.

The CEIR Index can be a basis if strategic planning, help to better understand and  how to position their events,  and how to budget and plan for the events.