“The problem is people have been taking this [estimate] as if it were written in stone,” said Alain Servais, a collector with a background in financial services who has criticized the report’s methodological limitations in the past. “People keep repeating all day long the art market is $65 billion, and all of a sudden we have a figure of $45 billion—so what are people going to use in the future?”
Another major finding of the report is that private transactions through dealers now account for 62.5% of global sales, a 20% increase over 2015. The previous report estimated the art market was about half private sales and half sales at auction.
Evan Beard, head of art services at U.S. Trust/Bank of America Private Wealth Management, said the growth of the private market reflected what he saw among his clients in 2016, a year marked by political and economic upheaval.
“Consigning at auction is a four-month process,” he said. “Last year, Brexit, the election, and geopolitical uncertainties drove people into the private market where they have more control over the sales process.”
Neither right nor wrong
Pownall, TEFAF Chair in Art Markets at Maastricht University, arrived at her estimate using a new methodology based on official data from government statistics offices and the United Nations, auction data from Artnet, sales data from the Orbis registry of private businesses, and survey responses from roughly 350 dealers (that figure comes from the 5% response rate she received after sending out 7,000 surveys). She received data on private sales at auction houses directly from the auction houses.
She said she hoped the new methodology could be used as the starting point for a discussion, “not ‘this is right’ or ‘this is wrong.’” Pownall added that she did not know the exact methodology used by the report’s previous author Clare McAndrew, who will present her own take on the art market in 2016 later this month as part of a new report commissioned by UBS and Art Basel. However, it seemed to draw largely on extrapolations from Artnet auction data and a more comprehensive dealer survey with roughly twice as many respondents.
“I wanted to make it different from Clare’s approach,” she said. “It’s important to have different data sources and different information.”
Out with the old, in with government statistics