Art Basel and UBS published the third edition of the Art Basel and UBS Global Art Market Report. Written by renowned cultural economist Dr. Clare McAndrew, Founder of Arts Economics, The Art Market 2019 presents the results of a comprehensive and macro-level analysis of the global art market in 2018. Last year, the global art market grew by 6%, reaching an estimated $67.4 billion, with the United States extending its position as the largest market and the United Kingdom regaining its place as the second largest market ahead of China. Sales in the dealer sector increased, driven by gains at top end and marked by further consolidation overall. Equally driven by the top end of the market, sales at public auction also increased with the United States showing the strongest growth. In this report, Dr. McAndrew delves deeper into the collecting behavior of HNW collectors across five national markets, undertaken in partnership with UBS, as well as analysing issues related to artists’ representation and gender in the art market in 2018. The full report is free to download on the Art Basel and UBS websites.
Here are the Key Findings:
Showing a second consecutive year of positive growth, the global art market in 2018 reached $67.4 billion, up 6% year-on-year. This brings the market to its second highest level in 10 years, with values advancing 9% over the decade from 2008 to 2018.
The top three markets – United States, United Kingdom and China – further cemented their position in the market in 2018, accounting for 84% of total sales by value.
- The United States was again the largest market by value with an estimated market share of 44%, up 2% in 2018. Sales reached $29.9 billion in 2018, their highest recorded level to date.
- Despite the escalation of the Brexit crisis and widespread uncertainty regarding its future, the United Kingdom had a relatively strong year of sales in 2018, while in China, a contraction in supply of high-quality works and cautious buying as trade and debt crises loomed, led to declining values in the dominant auction sector. This mixed performance saw the United Kingdom regain second position with 21% share of the market, while China decreased by 2% to 19% and third place.
Sales in the dealer sector increased 7% year-on-year to an estimated $35.9 billion, however, performance was mixed between sectors and segments. 28% of respondents to the annual dealer survey conducted by Arts Economics for this study reported positive year-on-year growth, 15% reported that sales were stable and 57% indicated a decline in sales. In 2018, on average, dealers with turnover below $500,000 saw a drop in sales (of 10%), while those with sales above it all increased. Dealers with sales below $250,000 reported the most significant drop in average turnover, with a decline of 18%. The most improved segment was dealers with turnover between $10 million and $50 million: in 2017, these dealers showed a decline in sales of 3%, whereas in 2018 they increased by 17%.
Sales at public auction of fine and decorative art and antiques reached $29.1 billion in 2018, up 3% year-on-year. Works of art selling at prices in excess of $1 million accounted for 61% of total sales value in the fine art auction market in just 1% of lots. The number of lots sold in this segment grew by 9% year-on-year, while values increased 13%, providing much of the drive for the rise in aggregate auction sales over the year. Auction sales in the US had the strongest growth of all major art markets, increasing by 18% to $11.8 billion. Sales in the UK also advanced by 15% year-on-year to $5.3 billion. Auction sales in China declined by 9% to $8.5 billion. The Chinese market also saw one of its highest rates of buy-ins with 57% of the works offered on the auction market in 2018 not finding buyers.
Art fairs continue to be a central part of the global art market, with aggregate sales estimated to reach $16.5 billion in 2018, up 6% year-on-year. The share of the total value of global dealer sales made at art fairs has grown from less than 30% in 2010 to 46% in 2018, stable year-on-year. On average, dealers attended four fairs in 2018, down from five fairs reported in the surveys of 2016 and 2017. Attendance ranged between sectors and segments with more than 25% of the sample exhibiting at 10 or more fairs. In 2018, dealers reported spending an estimated $4.8 billion attending and exhibiting at fairs, a rise of 5% year-on-year.
The online art market reached an estimated new high of $6 billion in 2018, up 11% year-on-year. This represents 9% of the value of global sales. Online sales gathered pace at the major auction houses in 2018, while second tier houses reported making 19% of their annual sales online, with 74% through third party platforms. Dealers reported that they made 6% of their total sales online in 2018, a stable share on 2017. Over half (52%) of them were to new buyers, up 7% on 2018. Based on a survey of five national markets in 2018, 93% of millennial High Net Worth (HNW) collectors reported that they had bought works of art or objects from an online platform, compared to a majority of baby boomers who had never bought art online before.
Global Wealth and Art Buyers
In collaboration with UBS, Dr. McAndrew was able to gather fresh insights on the collecting behavior of HNW individuals in five markets: the United Kingdom, Germany, Singapore, Hong Kong and Japan. In previous surveys of US collectors, the majority of respondents were aged 50 years and over, however, in the newer markets in Asia, a very different age profile emerged in 2018: in Singapore, 46% of collectors were millennials, and 39% were millennials in Hong Kong. Collectors from the millennial generation were considerably more active art buyers than others, with 69% having purchased fine art and 77% having purchased decorative art in the period from 2016 to 2018. Millennial collectors made up just under half (45%) of the high-end spenders ($1 million plus), underlining the importance of the spending power of this demographic. While galleries and auction houses were the most commonly used channels for purchasing, art fairs were also important, especially in Asia, with between 92% and 97% of collectors from Singapore and Hong Kong having purchased from an art fair, compared to 68% and 72% in Japan and the UK respectively.
Artist Representation and Gender Issues
Gender disparities in the art market have been the subject of continued study and debate for many years. Research on the auction sector has shown that there is a gender discount of close to 50% in the paintings market at auction, and this discount is higher in countries with greater gender inequality. Statistics have also been tracked over time to show the changing share of female artists in exhibitions. Gender imbalances in the gallery market are no exception and have been brought to light in different contexts for some time, with rising debate in recent years regarding the reasons for their persistence. Highlights of research presented in this report includes:
According to data from Artfacts.net, the share of women in global exhibitions has grown from 25% in 2000, up to 33% in 2018.
For those galleries working in the primary market, 36% of the artists they represented in 2018 were female artists, which accounted for an average of 32% of their sales. While the gender breakdown for those artists represented by one gallery is 36% female, when the representation at galleries starts to increase, the share of female artists steadily declines. Considering artists represented by five or more galleries, the share of female artists drops to 17%, and for more than 15 galleries, just 10%.
63% of the total sales of galleries working solely in the primary market in 2018 came from their top three artists, with 42% of value in 2018 accounted for by one leading artist. In the primary market, 45% of the value of annual sales for those dealers with turnover less than $1 million is accounted for by one leading artist, versus 29% of those with turnover exceeding $10 million.
The art market directly employed an estimated 3 million people in 2018 – with approximately 310,700 businesses operating in the global art, antiques and collectibles market, relatively stable on 2017. It is estimated that last year, the global art trade spent $20.2 billion on a range of external support services directly linked to their businesses, an increase of 3% year-on-year, supporting 375,030 further jobs.
Comments and Reactions
Clare McAndrew, Founder, Arts Economics said: “While we’ve seen another strong year of aggregate sales, the mood of the market in 2018 was generally less optimistic, as many wider economic and political issues continued to weigh heavily on sentiment. This drove some risk-averse buyers and sellers towards private sales in the dealer market, which saw strong sales overall. The auction market also maintained pace but with wide variations between countries and price segments. Countering this, a very positive finding of the research this year was the dynamism in collecting by global millennials. New research on global HNW collectors showed that the millennial generation were considerably more active buyers in all sectors of the art market than other generations, and accounted for about half of those collectors regularly spending at the level of $1 million or higher. It also made clear that their spending patterns and preferences had more in common with other millennials across regions than they did with collectors within their own region from a different generation. Understanding the preferences and motivations of these key global demographic segments will prove critical for the art trade in future.”
Noah Horowitz, Director Americas, Art Basel said: “This report is essential reading for arts professionals, providing a measured macroeconomic synopsis of where the art market is today and where it is headed. While overall results were up in 2018 – driven by continued gains at the top end of the market, with notable green shoots in the online segment as well as with a younger generation of increasingly international collectors – Dr. McAndrew’s study draws readers’ attention to shifting confidence indicators as well as to a broad range of critical business challenges.”
Mark Haefele, Chief Investment Officer, UBS Global Wealth Management: said: “The art market is a fascinating reflection of economic developments and trends in wealth creation. Most notable is the growth of billionaire and millennial spending power, particularly in Asian markets. As ever, passion remains the market’s lifeblood and drives the best collectors who value quality pieces that provide pleasure and cultural enrichment.”
Please click here to download the full Art Basel and UBS Global Art Market Report for free.
For more information of Dr Clare McAndrew and Arts Economics visit her website.