The World’s Strongest Economy? The Global Art Market.

15 january 2013

The annual Artprice report is out – the first of a group of annual analyses of the global art market, most of which generally repeat each others’ findings in one way or another.  The biggest news:  art sales for 2011, according to ArtPrice, were the highest in history:

So in spite of the sword of Damocles hanging over the West, art in fact sold better in 2011 than at any other time in history with $11.57 billion in total global annual revenue, up $2 billion versus 2010, which already produced the best performance of the decade. This increase was not solely generated by the Chinese market’s 49% growth compared with 2010; it represented overall growth… including European. Indeed, the leading European auction markets posted strong figures: +24% in the UK ($2.24 billion in 2011 vs. $1.81 billion in 2010), +9% in France ($521 million vs. $478 million in 2010) and +23% in Germany ($213.9 million vs. $174 in 2010). In the Top 5 market places, only the USA contracted with a revenue total of $2.72B, down 3% vs. 2010.

In 2011, the high-end market displayed an extraordinary dynamism. No fewer than 1,675 artworks sold above the $1 million threshold (including 59 above the $10 million threshold) representing a 32% increase of 7-figure (or more) auction sales versus 2010 and an increase of 493% versus the start of the decade! And it comes as no surprise that China posted by far the best national score with 774. Indeed, Hong Kong posted twice as many million-plus results as the entire Euro area! Further evidence of this exceptional health: the year saw no less than 12,400 new auction records for artists (excluding auctions debuts).

Personally, I have my doubts as to the sustainability of the Chinese market – as should anyone who is old enough to remember Japan’s hold on the art market during the 1980s.   While Chinese Contemporary continues to be a viable niche, it remains mostly local and even the top Chinese artists are burning out, with the exception of extraordinary talents like Cai Guo-Qiang.  Despite that, Artprice continues to bet on China, noting that  ”if we analyse the Top 10 artists ranked by turnover, the top 2 are Modern Chinese masters whose performance exceed those of Andy Warhol and Pablo Picasso by several tens of millions of dollars.”

Other highlights from the Artprice report are less surprising (despite an overuse of exclamation points): Is there anyone who didn’t know that Modern and Contemporary were the top-runners? Still, Artprice gives the real numbers:

Modern art is currently the heart of the global art market. It is the densest (10 times the Old Masters segment in terms of volume) and most profitable segment. 2011 was the best of the decade for the sale of modern works with particularly strong demand (more than 164,000 works sold, a record for the decade) and an outstanding revenue total of $6.067B, [sic] representing 52.4% of total global art auction revenue (all artistic periods combined). In 2011, the revenue from Modern art was up $1.218 billion versus 2010 which was itself a record year!

As for Contemporary sales, say Artprice’s editors:

The number of contemporary works of art sold has more than tripled over the decade. In 2011, more than 41,000 Contemporary works sold worldwide, a record number which generated a revenue total of over $1.26 billion compared with $87.7 million in 2001. Contemporary art certainly has the wind in its sails, but it has not become unaffordable since 62% of Contemporary works sold for less than $5,000 in 2011. However, prices are rising and the market’s high-end accounts for an increasingly large share of the total Contemporary art market. In fact 2011 was marked by no fewer than 1,879 bids above $100,000, five hundred more than in 2010.

The Artprice “Top Ten” list emphasizes sales of Chinese artists, who clearly outnumber non-Chinese artists in terms of prices at auction.  What Artprice  overlooks, however, are the private sales — no one can compare with the $250 million Cezanne! — and the limited market for these artists worldwide.  (Artprice has long promoted the strength of the Chinese market. I have long been skeptical.)  Consequently, I somehow doubt that Picasso will remain in fourth place for very long; more to the point, I hesitate to think that he’s that much less significant than the top-seller, Zhang Daqian.