How The Economy Is Affecting B2B Exhibitions in 2017

After a year of slow growth for trade shows, the exhibitions industry is monitoring the global financial forecast.

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At the beginning of 2017, trade-show organizers were forced to confront an unfriendly adage: All good things must come to an end. After posting 25 consecutive quarters of year-over-year growth, the Center for Exhibition Industry Research (CEIR) revealed that overall performance of B2B exhibitions declined in the final quarter of 2016. “We believe it’s a short-term issue,” CEIR CEO Cathy Breden told Convene at the time. “All the underlying fundamentals that our economists believe are essential to a healthy exhibition industry are still there.” 

headshotNow, with the release of the complete 2017 CEIR Index, Breden’s prediction appears to be correct. While the 1.1-percent annual growth rate in 2016 was relatively sluggish, CEIR estimates that the trade-show industry will grow by 2.4 percent this year. By 2019, the news will be even better, with a projected growth rate of 3 percent. The increases will come in every area that CEIR tracks: net square feet, number of attendees, number of exhibitors, and total revenue.

The exhibitions industry’s performance traditionally follows the same path as U.S. GDP, which has looked promising throughout the beginning of 2017, with the Dow Jones Industrial Average hanging above 20,000. Employment numbers seem poised to rise, too. “A bill for infrastructure spending will most likely pass, because it’s favored by both parties in Congress,” Breden said. “If that happens, it’s good news that will translate to an increase in jobs.”

Outside of hypothetical scenarios for the macroeconomy, Breden cited major moves — Informa’s $1.6-billion acquisition of Penton, and UBM’s $485-million acquisition of Allworld Exhi-bitions Alliance — as another indicator of a healthy industry. “It’s good to see merger-and-acquisition activity increasing within the exhibition space,” Breden said. “It means the bigger players certainly recognize the value of trade shows.

plenary_lead_turn_balloonPROCEED WITH CAUTION

Despite all the positive signs, Breden highlighted that the threat of an economic slowdown still lingers over show floors. “Our economists put the threat of a recession in the U.S. somewhere between 15 and 25 percent,” Breden said. “With current political turmoil overseas and concerns about trade wars and deportation threats at home, there could be plunges in the stock market.”

Plenty of experts outside the industry have voiced concerns, too. “Capitalist economies do not simply grow steadily larger,” Jay Zagorsky, an economist and research scientist at Ohio State University, wrote in an essay for The Conversation, an online academic and research community, earlier this year. “Even though many indicators look amazing today, if history is any guide, we are due for another economic downturn.”

BETTER PREPARED FOR POTENTIAL PROBLEMS

Rumors of recession naturally will scare anyone responsible for selling booth space and filling show floors with prospective buyers. The Great Recession may be in the rearview mirror, but business-events professionals remember suffering through poor attendance and a string of cancellations; in 2009, the CEIR Index reported a 10-percent decline for trade shows. Eight years later, however, it appears that the industry has more of a cushion. In-person events ranked as the most effective marketing tool among B2B marketers in a 2016 study conducted by the Content Marketing Institute, outperforming webinars, videos, online presentations, and a range of other digital tactics.

“In the past, whenever companies have faced uncertainties, the marketing team was the first to go,” Breden said. “But it’s clear that having a strong marketing plan with a portfolio of in-person events is even more important than what it has been in the past. I think companies recognize the crucial role that trade shows play in maximizing the effectiveness of their digital marketing efforts.”

Breden also credited the efforts of the Meetings Mean Business Coalition and the U.S. Travel Association to articulate the value of face-to-face events. “Regardless of disruptive changes in technology, I think we have done a good job of proving that there will always be a need for buyers and sellers to meet in person,” Breden said. “But that doesn’t mean that trade shows will always look the same. A number of people are beginning to experiment with different models. There will be different ways for people to come together in the future.”

 

David McMillin

David McMillin is staff writer at PCMA.