Global Art Market Shrinks 4%—Art Basel and UBS Report

London Follow +

Following two years of growth, the global art market shrank 4% to U.S. $65 billion in 2023, according to The Art Basel and UBS Global Art Market Report 2024.

‘A backdrop of increasing interest rates, stubbornly high inflation, wars, and political instability filtered down into more selective and cautious buying at the high end of the market, which had been pivotal to the revival of sales after the COVID-19 pandemic in 2021 and 2022,’ wrote the report’s author, Dr Clare McAndrew.

The U.S. fell 10% to $27.2 billion but remains by bar the biggest art market with 42% of sales by value compared to China’s 19%, Britain’s 17%, and France’s 7%.

The United Kingdom declined 8% to $10.9 billion, falling behind China, which rallied 9% to $12.2 billion as pandemic restrictions were finally lifted.

China cannot be counted on to drive growth in 2024, however, with cooling economic growth and a rising debt-to-GDP ratio. Last week, Chinese Premier Li Qiang acknowledged that ‘the foundation for the continuous recovery and improvement of our country’s economy is still not solid, with insufficient demand, overcapacity in some industries, weak societal expectations, and many lingering risks.’

Hong Kong’s Hang Seng Index, an indicator of confidence in the Chinese economy, slid to 17,082 at time of reporting, barely higher than the 16,647 it reached way back in 1997 when Britain returned Hong Kong to China.

Perhaps the most notable result in this year’s report is the rise of smaller dealers following years of the market’s major players driving growth.

In 2023, the total volume of art transactions increased, driven by more moderately priced works. Average sales for dealers with turnovers under $500,000 expanded by 11% while those above $10 million declined 7%.

‘These tendencies were reflected qualitatively as well, with a softening of frenzied speculative buying and more value- and quality-conscious collectors setting the pace,’ McAndrew wrote.

Looking ahead, 36% of dealers were anticipating a better year in 2024—down from 45% at the end of 2022—compared to 16% who thought sales would decrease. Larger dealers were more optimistic, with 54% expecting sales to increase. —[O]

Main image: Dr Clare McAndrew. © Paul McCarthy.