Market Watch 2008: Art Market Conditions, Trends and Forecasts for the New Year
Kiley, Gabriel, Art Business News
The beginning of a new year is often the time for predictions for any industry, and the art market is no exception.
With this in mind, ABN asked the following industry officials to offer their insights into the condition of the art market and trends for 2008:
* Robert Bluver and James LaMantia, co-owners, LaMantia Gallery, Northport, N.Y.
* Daniel Deljou, president, Deljou Art Group, Atlanta
* Gary Handler, gallery director/co-owner, Vinings Gallery, Smyrna, Ga.
* Nan Miller, owner, The Nan Miller Gallery, Rochester, N.Y.
* Todd Scalise, gallery administrator, Wiford Gallery, Santa Fe, N.M.
* Rosie Sumner, managing director, Fine Art Trade Guild, England
* Daniel Winn, CEO, Masterpiece Publishing, Irvine, Calif.
The economic news in recent months is cause for pause for those in the art market. The widely reported struggles of the housing market, a worsening credit crunch and the high cost of gasoline are among the primary concerns of financial experts.
Although Federal Reserve officials predict economic growth for 2008--albeit slower than in past years--some analysts believe the U.S. economy could be in a recession for the first time since 2001. In fact, according to the Blue Chip Economic Indicators survey, the odds of a recession this year are one in three.
Troubles aside, not all economic indicators are negative. The national unemployment rate continues to hold steady at a respectable 4.7 percent (7.2 million people) in November, according to the latest data by the U.S. Department of Labor. In comparison, the national average in 2006 was 4.6 percent. Plus, the Dow Jones industrial average reached the 14,000 mark for the first time in 2007--yet only briefly--before returning to the previous record level of 13,000 set earlier in the year.
In addition to a healthy stock market and low unemployment, people have more disposable income, according to the latest report by The Conference Board, a leading business membership research organization. The board reports that roughly 73 million U.S. households have discretionary income, up from about 57 million in 2002. Total discretionary income topped $1.7 trillion in 2006, with nearly 78 percent of it being held by households earning more than $100,000.
So, how does the conflicting economic news affect customers' spending habits in regards to purchasing artwork? Leaders in the art market remain optimistic about the financial stability of the industry. "The art market rides above housing market trends," says Todd Scalise, gallery administrator for Wiford Gallery in Santa Fe, N.M. "There will always be art collectors; most of them already have homes, nice cars and are always looking for the next national talent. More pragmatic factors such as gasoline prices affect our shipping but rarely affect a collector's decision to buy."
Gary Handler, gallery director and co-owner of Vinings Gallery, says his business in suburban Atlanta has continued to experience 10-to 20-percent increases in business in each of the past six years. "Everyone's been questioning the economy in the past few years, but we've never gone backward in growth," he says. "I don't see it. I'm not buying into it."
In the Northeast, Robert Bluver, co-owner of LaMantia Gallery, says the local economy of the North Shore of Long Island (outside New York City) seems unaffected by the negative economic news. "The housing market is not as depressed here as it is in other parts of the country," he says.
Daniel Winn, CEO of Masterpiece Publishing in Irvine, Calif., is a little more cautious. He believes the struggles in some sectors of the U.S. economy "create uncertainty in the art market."
"The stock market and the housing market are two major factors that affect how people feel about disposable income," he says. …