2012 Gold Rush - Trade Show Executive

MONTH IN REVIEW
CEIR Predict Conference Reveals
Exhibition Industry is Growing at Same Pace as GDP
BY DANICA TORMOHLEN, contributing editor
New York, NY – About 120 trade show
executives, economists, M&A and financial
professionals, and supplier sponsors gathered
for the 2nd Annual Center for Exhibition
Industry (CEIR) Predict conference, held
September 13 at the Time Warner Center
in New York. The one-day event provided
analysis and a three-year forecast for the
exhibition industry and the economy.
Overall, CEIR said the exhibition industry
was on pace with the U.S. economy in
the first half of 2012. U.S. GDP grew 2.4%,
compared to the 2.3% growth of the exhibition
industry in the first half of 2012.
Attendance grew 3.8%, followed by a 3.0%
growth in real revenue, 1.9% in net square
feet and 0.6% in number of exhibitors.
“The average growth of 2% to 3% doesn’t
tell the whole picture,” said John Walker,
chairman and chief economist, Oxford
Economics. “Many sectors are growing
rapidly, but others are seeing negative
growth. It’s been a feeble recovery.”
CEIR is forecasting growth in 2012
for all 14 exhibition industry sectors
tracked. The Transportation sector
posted the strongest gains in the first half
of 2012, increasing 11.8% year-over-year.
The Education and Not-for-Profit sector
posted the largest decline in the first half
of 2012, decreasing (3.9)% year-over-year.
Just like last year, many of the speakers
expressed cautious optimism about
the future. “The U.S. economy isn’t really
doing that badly,” said Walker. “The U.S.
economy is growing at a faster pace than
many countries, and I think it will do
well no matter who wins the election.”
As evidence, he cited the fact that durable
goods are strong, U.S. banks are in a
better place to support growth following
recent regulations, and the housing
crisis is essentially over.
Despite the optimism, there are still a
number of major risks that could send the
U.S. and global economies into a tailspin.
“Many people think the Eurozone will
not survive, and that would devastate the
U.S. economy,” said Walker. “But we don’t
think the Eurozone will break up.” Oxford
Economics predicts there is only a 35%
chance for a breakup of the Eurozone.
In addition, austerity measures by governments
worldwide may temper growth.
Oil prices are also a big risk. “If oil prices
top $200 a barrel, U.S. GDP growth would
decline considerably from the forecasted
growth,” said Walker. “There’s also a huge
potential for U.S. fiscal tightening in 2013,”
he said. Several key government measures
— such as spending cuts, the payroll tax
holiday, and Bush-era tax rates — are
currently set to take effect in 2013.
Forecast by Sector
The Building, Construction, Home and
Repair sector continued to struggle in
2011, posting a (5.0)% decline for the year.
In 2012, the sector is expected to post a
slight increase of 0.8%. CEIR is predicting
a modest increase (under 3%) for this sector
in 2013 and 2014. Housing starts have
increased from 500,000 in 2009 to 800,000
in 2012, but it’s a long way off from the
2 million housing starts in 2005. “We are
moving in the right direction,” said Frank
Anton, vice chairman, Hanley Wood,
LLC. “Up is better than down.” Anton
said Hanley Wood’s World of Concrete is
up 5% in 2012, and the company’s revenues
are up 10% for the year after falling
(35)% when the housing market collapsed.
The Transportation sector grew 6.0%
in 2011, led by a 9% increase in attendance.
CEIR is predicting the sector will
grow 3.5% in 2012, followed by a 3% to
5% growth in 2013 and 2014. “We own
and manage 26 events in the construction
and trucking industries, and many
have recorded double-digit growth from
2011 to 2012,” said Mike Reilly, chairman
and CEO, Randall-Reilly Business Media
& Information. “We are budgeting for
double-digit growth in 2013 as well.”
The Government sector grew 7.0% in
2011, led by an increase of 9.0% in nsf and
8.0% in revenue. CEIR expects this sector
to grow at a much slower pace of 2.5% in
2012, followed by modest growth (under
3%) in 2013 and 2014. “We are seeing
exhibitors take smaller booths overall,”
said Neal Vitale, president and CEO,
1105 Media, Inc., which produces the
FOSE Conference & Exposition. “But we are
seeing the same revenue because we are
producing more custom events for some
of these exhibiting companies.”
The Medical and Healthcare sector
posted no growth in 2011 over 2010. CEIR
expects this sector to post a slight increase
of 0.8% for the year, and modest growth
(under 3%) in 2013 and 2014. “Over the
last 50 years, the medical and healthcare
industry has seen massive expansion, from
5% of U.S. GDP to 17.5%,” said Matthew
Holt, co-chairman, Health 2.0. “During
the last 15 years, there’s been huge growth
in pharmaceutical and imaging.” But
uncertainty about healthcare reforms,
increased regulations, and the decrease
in new drug launches has tempered
growth for some shows in this sector.
The Sporting Goods, Travel and
Amusement sector posted a (1.0)% decline
in 2011 compared to 2010. CEIR
predicts the sector will increase 1.3%
overall in 2012, followed by modest
growth (under 3%) in 2013 and 2014.
“Sporting goods has been outperforming
general retail,” said David Loechner,
president, Nielsen Expositions, which
produces the Outdoor Retailer Winter and
Summer Markets, as well as shows in 12
other industries. “The word of the day for
us: Uncertainty. Exhibitors have scaled
back according to their level of fear.”
The Industrial/Heavy Machinery and
Finished Outputs sector posted increases
in all metrics — nsf, attendance, exhibitors
and revenue — from 2010 to 2011, ending
the year with 11% growth. CEIR is expect-
6 November 2012 | Trade Show Executive