by Steven Hacker | June 01, 2017

The performance of industry trade shows today nearly always mirrors the state of that particular industry. While most have become incredibly complex and multifaceted events, the fact remains that a trade show’s underlying financial performance, size and attendance tend to accurately indicate how well—or poorly—an industry is doing. The 2017 Center for Exhibition Industry Research Index Report substantiates this as well.

The annual CEIR Index offers a detailed analysis of the exhibition industry as well as a forecast based on data gathered from 218 shows across 14 different industry sectors such as consumer goods, raw materials, government services and food, just to name a few. The index measures performance in four key categories: the net square feet of exhibit space sold, the number of exhibiting companies, professional attendance and revenue. Additionally, it compares overall industry performance against America’s gross domestic product performance. While the report only includes results for events held in North America, given the enormity of the trade show market in the United States, Canada and Mexico—about half of all trade shows in the world—the results reflected in the index largely shape global results.

Measuring Metrics. The unique value of the CEIR Index for any trade show organizer is that you have a convenient yardstick with which to measure the metrics achieved by your own event against the performance of other trade shows in your business sector. Let’s say you conduct an event in the medical and health care sector. The CEIR 2017 Index reports that the average metrics for events in this sector include rising attendance (4 percent), more exhibitors (2.2 percent), greater net square feet (2 percent) and a growth in real revenues (1.9 percent). How did your event do stacked up against those figures? Many show organizers tell me they have begun to present comparisons of their event’s performance against the appropriate business sector to their board of directors to help secure adequate budget dollars and to laud the efforts of their show’s staff.

The value of the CEIR Index as a budget-forecasting tool cannot be overstated. The analysis of each of the 14 business sectors takes up 157 pages of the report, with commentary and charts authored by leading economists. Based on the data, the report also suggests what each sector’s near-term experience might be like, a valuable, high-grade financial forecast in the eyes of many organizers.

Daniel McKinnon, CEIR’s current board chairman, offered his thoughts on the trade show industry’s 2016 performance. “While the year ended with 1.2 percent growth of the total index, some sectors outperformed projections while others struggled,” he said. “As might be expected, the raw materials sector continued to struggle due to low oil prices, resulting in declining investment and production levels. This decline resulted in lower attendance at raw materials exhibitions and impacted the results of the total index.”

Gauging the Economy. In the first quarter of 2017, the Dow Jones industrial average soared by more than 10 percent, roaring past the 20,000 mark for the first time ever, largely based upon expectations that the Trump administration will succeed in boosting business growth, while reducing the twin burdens of tax and regulation on businesses. However, troubling early indications and a series of rookie fumbles by the administration cast doubt upon the best of these expectations and may ultimately result in a market correction while weighing down the performance of some business sectors. The nation is overdue for a routine market correction and economic recession. And if the worst were to occur, history tells us that the performance of the trade show industry will serve as a leading indicator.

Looking back, 2016 was a somewhat disappointing year in terms of trade shows’ overall industry performance—just 1.2 percent—but it should come as no surprise. Although the nation’s GDP grew 2.6 percent in 2015, it registered a growth of only 1.6 percent last year, its worst performance since 2011, according to the U.S. Department of Commerce.

Here’s where I circle back around to my first point: Just as trade shows are accurate mirrors of the state of the industries they serve, the overall performance of the trade show industry almost always reflects the state of the U.S. economy. The included chart (right) tracks GDP and trade show industry performance over time.

Although there is normally a close correlation between the U.S. GDP and the overall performance of the trade show industry, the chart demonstrates a wide variance between the two beginning in 2008 and ending in 2011, revealing how the Great Recession severely damaged the economic performance of the industry, really for the first time in history. The industry’s recovery from this recession was long and painful and shocking to some as, before it occurred, many industry analysts believed the trade show industry to be largely recession-proof. How wrong that notion was.

Positive Indicators. There were positives reported in the 2017 CEIR Index. The food exhibition industry lead growth among all business sectors in 2016. Many events in this sector registered very robust attendance increases (6.4 percent) as well as sales of exhibit space (3.7 percent) and attendance (6.4 percent), resulting in average revenue growth of 8.9 percent.

Another leading growth sector is shows that feature discretionary consumer spending, which accounts for more than two-thirds of U.S. economic activity, registered a 3 percent growth in the fourth quarter of 2016 and appears to be sustaining that expansion into 2017. However, there is an important distinction built into the CEIR Index between the sectors of consumer goods and retail trade (CG) and discretionary consumer goods and services (CS); the CG sector includes industries representing apparel, gifts, hardware, housewares, jewelry, laundry and dry cleaning, leather goods and luggage, lighting, office equipment and supplies, and photography, while CS consists of industries of art, beauty and personal care, religious, rental and leasing, toys and hobbies, and wedding and other consumer services. The key differentiator is the word “discretionary.”

According to the CEIR Index, “The performance of discretionary consumer goods and services (CS) exhibitions, as measured by the CEIR Total Index, gained a solid 4.3 percent in 2016, marking the seventh consecutive year of gains. Growth was observed in all four CEIR metrics, but surging exhibitor participation (6.9 percent) and real revenues (5.2 percent) were most notable.”

Entering a “Golden Age.” CEIR Index results aside, any serious observer of the trade show industry must conclude that circumstances have never been more promising for what some are already referring to as the beginning of a “Golden Age” for the exhibition and events industry. There are several indicators supporting this abundant optimism:

● Advancing technologies like virtual and augmented reality, robotics, drones, the Internet of Things (IOT) and immunotherapy are not only rapidly advancing learning and knowledge, they are creating new and completely unique opportunities and are fueling the creation of entirely new and unique businesses and industries, all of which will demand exhibitions where innovators can display their capabilities and connect with new kinds of customers.

● Likewise, advancing technologies allow us to plan, manage and analyze exhibitions in ways that heretofore have been unimaginable. Think about iBeacons, mobile apps and lead generation capabilities that are delivering new forms of engagement for anyone who participates in trade shows.

● Globalization is also expanding market opportunities in unprecedented ways. New exhibitions are exploding in nations never before considered as exhibition destinations, like Vietnam, Myanmar and Cuba. National pavilions at events throughout the world are blossoming like dandelions.

Despite having spent years trying to constrain my own inherent enthusiasm for exhibitions and events—I have never coveted the role of industry cheerleader—it has become apparent to me that even though unavoidable setbacks and challenges await, there has never been a better time to produce exhibitions and events.