Art Market

The Global Art Market Reached $67.4 Billion in 2018, up 6%

Benjamin Sutton
Mar 8, 2019 6:01AM

A woman views David Hockney, Portrait of an Artist (Pool with Two Figures), at Christie’s, New York, 2018. Photo by Timothy A. Clary/Getty Images.

The global art market grew 6% in 2018 to $67.4 billion in sales, according to economist Clare McAndrew’s report “The Art Market 2019,” released by Art Basel and UBS on Friday. That total makes 2018 the second-biggest year for the art market in the past decade, trailing only 2014 when sales totaled $68.2 billion.

The market is expanding into fewer hands, however, the report suggests. Despite the 6% growth, 57% of dealers saw their sales decline in 2018. This follows a trend over the past decade, during which the value of all sales has gone up 9%, while the number of artworks sold has gone down 9%.

In 2018, less than 5% of dealers accounted for 50% of the sector’s sales. Dealers in the two lowest brackets of annual turnover, sub-$250,000 and $250,000 to $500,000, saw sales decline by 18% and 4%, respectively, while dealers in the two highest brackets, $10 million to $50 million and $50 million-plus, saw their sales increase by 17% and 7%, respectively.

This uneven growth has been a subject of concern and conversation across the industry in the past year. Combined with anxieties over Brexit, the trade war between the United States and China, slowing global growth, and a sense of political uncertainty, it contributed to a general feeling of consternation within the industry about the immediate future.

Whereas, in 2017, 58% of dealers surveyed by McAndrew expected sales to go up the following year, this year’s report shows significantly lower confidence, with just 30% of dealers expecting their sales to increase in 2019. McAndrew said this apprehension reflects a general level of macroeconomic uncertainty to which smaller galleries and those that haven’t modernized their business practices are especially vulnerable.

“Those older business models are not working as well as they used to,” she said. “The market is fundamentally changing and the macro environment that people are working in is unpredictable.” McAndrew added that, among the roughly 6,500 dealers who responded to the survey on which the report’s data on gallery sales is based, many noted feeling that they had been fortunate to come out of 2018 in the black.


“A lot of people did pretty well in 2018,” she said. “But there was a sense of, ‘thank goodness we got through that. What’s going to happen next?’”

The sense of vulnerability, especially for smaller galleries, may have been extenuated by their reliance on a few saleable artists. According to the report, among galleries working only in the primary market, 63% of all sales were of works by the gallery’s three most popular artists, with a single artist accounting for 42% of all value for the year on average. These sought-after artists often get picked off by bigger dealers, something that has contributed to a dynamic of so-called superstar economics in the art world, as McAndrew has written about previously for Artsy.

“Smaller galleries put so much effort, time, and money into artists at the beginning of their careers, and then they’re getting cherry picked and taken,” she said. This means that, unlike early-stage investors in the business sphere, these galleries rarely see a meaningful return on their investment.

“It really [drives] home what a precarious position some of the smaller galleries are in,” she said.

That precarity helps explain the drop in new galleries opening over the past 10 years, McAndrew said. From 2008 to 2018, the number of galleries opening every year has dropped 86%, according to the report.

Uncertainty and unease affects the upper echelons of the auction and gallery sectors too. The report notes that lower industry sentiment tends to come with a concomitant decrease in supply of top-quality consignments that drive the margins of evening sales and private dealerships. Such supply constraints weigh all the more heavily when the market is driven by choosy collectors willing to wait, forgoing material of secondary quality in favor of masterpieces, as is the case currently. The impulse buying market present earlier in the decade has largely retreated, McAndrew suggests.

The report noted a modest increase of 3% in auction sales in 2018, up to $29.1 billion; sales had jumped 26% in 2017. The Christie’s-Sotheby’s duopoly held strong last year with the two houses collectively accounting for more than 40% of auction sales value. The top five houses—Christie’s, Sotheby’s, Poly Auction, Phillips, and China Guardian—made up more than half of all global auction sales value for 2018.

The report—which compiled auction data from the blockchain-based auction registry Artory; Art Market Monitor of Artron, which tracks Chinese market data; as well as published auction results and surveys of more than 500 auction houses—found that, collectively, the U.S., U.K., and China accounted for an overwhelming 88% of auction sales value in 2018, up 4% from 2017. And while there was robust growth in the U.S. and U.K. auctions sector, with increases 18% and 15% respectively, Chinese auction sales fell by 9% in 2018—a dip of 6% in mainland China and a precipitous drop of 22% in Hong Kong—to $8.5 billion.

Despite that dip, China still remained the world’s second biggest auction market, with 29% of total global sales. By auction volume, meanwhile, China was the global leader for the second year in a row, with 26% of the world’s public auction transactions. That said, overall auction transactions last year were down by 7% across the board from 2017.

Uncertainty and slowing growth may already have been a factor in China in 2018. After becoming the world’s second biggest art market in 2017, China fell behind the U.K. again last year. The U.S. market held its dominant position in 2018, accounting for 44% of the total global art market, followed by the U.K. at 21%, and China at 19%. Excluding the U.K., the European Union contracted its share of the market by 8% in 2018, continuing a 10-year slide of 24%.

McAndrew sees China’s drop to third as a sign that its market is maturing. “There seemed to be a kind of frenzy of consumption in China for a few years,” McAndrew said, “and that seems to have subsided.”

She expects that expansion and contraction in China’s auction market will be more closely correlated to drivers in the market globally going forward. These include “the general sentiment, the economy, how people are feeling about their financial confidence, and the supply,” she said, adding that “the supply of course in turn is affected by whether or not people perceive it’s a good time to sell or whether they should wait.”

The online market for art and antiques was a bright spot for both the dealer and auction sector in 2018, growing to $6 billion last year, an increase of 11% from 2017. McAndrew said she expects auction houses in particular to continue to move greater swaths of their inventory to online-only sales where margins are more favorable.

“The middle to the high end will stay offline,” McAndrew said, referencing conversations with executives at the major auction houses. “But all of the lower value lots will go online.”

“It’s too difficult to run a highly staffed and expensive business in big cities, for all those very low-volume lots,” she added.

McAndrew’s report also focuses in great and illuminating detail on the art market’s gender dynamics this year. She dedicated a new chapter to unpacking the pernicious biases working against female artists; part of that analysis was written by sociologist Taylor Whitten Brown and drew on Artsy’s internal data. McAndrew and Brown found, for instance, that the percentage of women artists represented by top tier galleries is significantly lower than the percentage represented by smaller and mid-tier galleries.

Galleries with an annual turnover of less than $1 million have rosters that are 38% female. However, that number goes down to 28% for galleries that do more than $10 million in business in a year. McAndrew said this seemingly blatant bias within the market has long gone unexplained.

“It’s not just a lack of supply of artists, because there are a lot of female artists,” she said. “It’s something that happens along the way. As a working mother in a different sector, I don’t think you can say that it’s because women drop out just because they have children. That’s a load of nonsense.”

One potential explanation: only 25% of buyers are female, according to the report, with female collectors accounting for just one third of dealers’ sales by value in 2018. This presents a potential opportunity for dealers, whose number one concern for the second year running was finding new collectors.

“Some of the bigger Western galleries really need to get some fresh buyers,” McAndrew said. There is a sense that some of the clients who have supported a gallery’s growth—or just kept the lights on—over the past five years may be tapped of resources or enthusiasm to collect at the same level.

“There are limits,” she said. “There’s a relatively small pool of very high-end buyers at any point, so in order to get more sales they need to branch out.” That can mean cultivating new regional markets via smaller art fairs or investing in new models and channels for sales such as ecommerce.

Despite that innovation and cultivation challenge—and the short term headwinds the art trade sees coming from the macroeconomic picture—there remains great optimism in the market long term. Over half of the dealers surveyed said that they expect continued growth in the art market over the next five years.

Benjamin Sutton