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