This Just In

CEIR Predict Offers Economic Forecasts, Industry Analysis

DANICA TORMOHLEN, EDITOR-AT-LARGE

New York, NY – “The U.S. economy is one of the few bright spots in the global economy,” Austin Kim, senior economist, Bain & Co. told attendees at the CEIR Predict Conference, produced by the Center for Exhibition Industry Research.  “But we are still facing a period of massive realignment.”

The third annual conference drew about 150 industry professionals to the Waldorf Astoria on September 12. Another 77 attendees participated online during a panel discussion on Mergers & Acquisitions that was simulcast live. In 2012, 120 industry professional attended the event.

“Overall, the exhibition industry trailed GDP in 2012 and continues to trail in 2013,” said Doug Ducate, president, CEIR, who will be retiring at the end of the year. “The exhibition industry grew 0.8% overall in the first half of 2013, compared with 1.4% GDP growth.” The outlook for 2014 appears to be continued slow growth across most industry sectors in the U.S.

Economic Snapshot

While the U.S. economy is growing, total consumption is lagging, which is slowing down the pace the growth. Only the most affluent consumers (those who earn more than $100,000 annually) are spending because most of their assets are tied to financial markets and the stock market continues to perform well.

Consumers earning $50,000 to $100,000 are not spending as much because most of their assets are tied to housing. “While there has been some improvement in the last 18 months, we don’t expect this segment to stabilize until 2015 or 2016,” said Kim.

The labor market isn’t expected to recover until the end of the decade, which has significant impact on consumers earning less than $50,000. Kim doesn’t expect this consumer segment to be fully recovered until the closer to the end of the decade.

Globally, Kim said Japan and Africa are poised for growth. China will continue to grow, but at a much slower pace of 6% to 6.5% in the next five to seven years. “The worst stresses on the Eurozone won’t be felt until the end of the decade,” said Kim.

Mayors Speak Out

The mayors of four major metropolitan areas – Baltimore, Dallas, Houston and Orange County, FL – discussed trade shows and the impact on their destinations. Dave Whitney, president, Destination Meetings Online, led a Q&A discussion with these political leaders.

When asked whether the economic impact of shows is enough to continue the funding and supporting of convention centers, Baltimore Mayor Stephanie Rawlings-Blake said: “It’s not, but those are the current market conditions. It’s sellable in our city because for every $1 we invest, we get a return of $4. We can justify the spending with that kind of return.”

Whitney asked the mayors why they are in the convention business. “Economic development,” said Orange County, FL Mayor Teresa Jacobs. “The county attracted 57 million visitors last year, but we are looking for more diversification with a mix of tourism and business.” She said the county drew 1.5 million conventioneers in 2012 with an economic impact of $2.1 billion.

The mayors were also asked about the recent decision by New York Gov. Andrew Cuomo to give preferred dates to a consumer show, which displaced a several trade shows. The mayors were in agreement that they would not allow political pressure to influence booking decisions at their convention centers. “I was as shocked as you were about the decision,” said Mayor Rawlings-Blake.

 

 

CEIR Index & Forecast

For the first half of 2013, the Business Services sector and the Raw Materials & Science Sectors performed the best, growing 3.9% year over year. The government sector reported the biggest decline, dropping (9.9)% compared with 2012.

“We expect another year of meager growth of 1.1% in the overall exhibition industry this year,” said Ducate. The good news: attendance rose 3.9% in the 2nd Quarter of 2013.

“The industry should gain momentum in 2014,” said Ducate. CEIR is predicting growth of 2.1% in 2014 and 3.2% in 2015.

CEIR released the latest CEIR Index Report at the Predict Conference; TSE will provide more charts and analysis in the October issue of Trade Show Executive magazine. The index offers an analysis of the 2012 exhibition industry and future outlook. The full report is available for $325 to CEIR members and $425 to nonmembers. Contact CEIR at (972) 687-9242.

SISO Surprise

At the close of the conference, David Audrain, chairman of Society of Independent Show Organizers (SISO) and president and CEO of Clarion Events North America, announced the association will donate $100,000 over the next five years to fund CEIR research.

“On behalf of CEIR’s Board of Directors, we are very grateful to SISO for their contribution,” said CEIR Chair and Greater Houston Convention & Visitors Bureau President and CEO Greg Ortale. “This unprecedented decision by a sister organization in our industry will greatly benefit CEIR’s long-term research initiatives to provide the critical research and information that businesses need to support exhibitions as a vital marketing medium.”

Reach Doug Ducate at (972) 687-9242 or dducate@ceir.org

Sidebar: Quotable

Industry executives presented analysis for their sector at the 2013 CEIR Predict Conference. Here are some of the highlights:

“We are seeing growth in Canada, Australia, Mexico and Brazil,” said Megan Tenel, vice president of exhibitions and events, Association of Equipment Manufacturers. “At this point, we have more than 2.31 million nsf reserved for the 2013 CONEXPO-CON/AGG, which is 6% larger than 2011 and 2% larger than 2008.”

“We continue to grow at 3%, with some markets up as much as 30%,” said Britton Jones, president and CEO, Business Journals Inc. “International expansion is key to growing both nsf and attendance.”

“In August, 1,250 exhibitors – 45% of total exhibitors – participated in NY NOW 365,” said Charles McCurdy, CEO, GLM. He said 45,172 products were displayed and 12,221 retailers registered (40%+ of total registrations). “We will monetize our digital extensions through audience marketing services, lead-scoring and data analytics.”

But e-commerce isn’t the answer for all shows. “We lost $10 million investing in e-commerce,” Chuck Yuska, president and CEO, PMMI, producer of PACK Expo. “People don’t buy packaging online. Capital goods markets are different.”

“The snow sports industry is challenged by consolidation at the supplier level and an increase in the number of regional and distributor shows,” said David Ingemie, president, SnowSports Industries America. “In 2002, SIA was the first show of the season. In 2013, there were 17 shows prior to our event and 19 following it.”

Other industries face similar challenges. Motorcycle and ATV unit sales peaked at 1.08 million in 2005, but the market dipped to less than 700,000 in 2012. “For the Dealer Expo, we’ve gone from 14,000 dealers to 10,000 dealers, and from an average of 19 employees per store to 11,” said Chris De Moulin, president of licensing and executive vice president of worldwide customer development, Advanstar. “With 60% of our attendees driving to the show, it has to be at the right place and right time. The Dealer Expo is moving from February in Indianapolis, IN to December in Chicago.”