The year 2013 was big for our industry. We’ve seen changes at the top for companies including UBM and Informa. David Levin departs the former having continuously realigned the company in the direction of exhibitions, a company that we must be reminded was poised to exit the exhibitions industry in 2004. At Informa, Peter Rigby leaves the top floor after reducing the company’s portfolio from 12,500 in 2007 to 6,500 in 2012 in favour of large events. It was the year that we saw evidence the clever money was not in a myriad small localised events, but in the giant international exhibitions and conventions that many industries consider the cornerstone to their international marketing drives.
The result is that half of all companies (varying between four and six out of ten) in all regions declared an increase of more than 10 per cent in their annual profits for 2013. The same applied to half of the companies in Germany and the US, and 41 per cent in China. The majority of companies in all regions declared an increase of their turnover since at least 2011.
Nonetheless, nearly two-thirds of the industry (63 per cent) claim the impact of the economic crisis on their business is not yet over and few expect it to happen before 2015. As the adage goes, despite being catalysts for industry, exhibitions have a delayed response to the markets they serve. In the meantime, most companies are planning new strategic developments with three-quarters planning new activities in either traditional exhibition activities (venue/organiser/services), in live or virtual events, or both. Just under half plan to expand their exhibition operations in new countries.
Commenting on the findings of the survey, UFI MD Paul Woodward said: “While we shall remain cautious about the development of the global economic situation, the exhibition media continues to demonstrate its strength with growth over the last four years. The industry remains remarkably dynamic with a majority of companies positively embracing the challenges of new ranges of activity or geographical development.”
Continuing a trend seen in the last Barometer, a large proportion of companies claim stable or increasing results: an overwhelming majority (95 per cent) in the Americas or in Asia/Pacific, 85 per cent in the Middle East/Africa and 73 per cent in Europe.
The pendulum swings west?
In broad economic terms, it will come as no great surprise to hear the emerging economies will continue to grow faster than those in the West, at an average of 4.7 per cent. But the gap with the developed market will narrow. Analysts are confident the balance will be adjusted this year, the end of ‘easy money’ in the emerging markets creating something of a braking effect. A slowdown is expected in China, with current-account deficits sustaining Brazil and India’s vulnerability to capital flight (the rapid flow of assets and money from a country), while Russia’s economy remains stagnant. For the first time in a while, the BRICs are unlikely to be the highest performing regions economically, suffering as investors withdraw investment fearing the prospect of inflated global interest rates.
“Next year will be the year that advanced economies get their mojo back,” economist Richard Boxhall of professional services firm PwC wrote at the beginning of the year. The firm claims Britain and the US will emerge as best performers, both growing by 2.4 per cent in 2014, according to the International Monetary Fund forecasts. They are joined by Japan and the Eurozone, all expected to grow in parallel for the first time in three years, contributing to a global growth rise from 2.3 per cent to around three per cent next year.
Of course the Eurozone remains the region most threatened by deflation, and will continue to spend 2014 attempting to reduce high interest rates in southern Europe. But continued fiscal rebalancing of the Eurozone aside, there appears to be a change of fortune in the emerging markets, having significantly outperformed the developed markets through the 2008-2009 global financial crisis. The west is resurgent.
Returning to the exhibition industry, the economic aftershocks created by the crisis still have some resonance. Asked whether its impact on their business was over or not, only respondents from the Americas declared its the impact on their business is now over. In all other regions the majority of respondents claim their business remains affected. The results are a significant change in direction compared with the June edition of the Barometer.
The number of companies claiming the impact of the economic crisis will end in 2014 has dropped from 36 per cent a year ago to 27 per cent today. More than half (53%) now say the impact of the crisis will only end in 2015, with a fifth expecting it to come later than that.
Where is the industry looking?
Asked to select the three most important business issues for the coming year from a list of seven, the results demonstrate continuity with all previous surveys. Around 80 per cent of all answers related to the following four issues:
Other issues keeping CEOs awake at night include environmental challenges (customer expectations, regulations) and competition from – and integration with – other media.
UFI conducted the 12th Global Barometer survey in December 2013, speaking to 178 companies from 57 countries. The association claims the situation appears “rather solid” with turnover increase for the majority of companies and roughly half declaring a 10 per cent annual profit increase since at least 2011.
However, with 63 per cent of respondents still feeling the impact of the recession and an expectation that they will do so until 2015 and beyond, we are seeing three-quarters of them still vying for growth through expansion they may not have engaged in the past.
Companies in the Americas, which accommodates both the emerging markets in Latin America – a target for expanding global organisers – and the developed, increasingly geographically explorative US in the north, have expressed the greatest desire to grow their operations internationally. Almost 60 per cent hope to operate in new countries throughout 2014, compared with less than half in other regions, so we can expect to see this continent of contrasts feature heavily in EW’s coverage in the months to come.
The 12th Global Barometer survey, conducted in December 2013, was answered by 178 companies from 57 countries. Full results can be freely downloaded at www.ufi.org/research. The next UFI Global Barometer Survey will be conducted in June 2014.
This was first published in issue 1/2014 of EW. Any comments? Email exhibitionworld@mashmedia.net
