Crisis barometer raises hopes of recovery

Most of the exhibition companies in the Asia-Pacific believe that the economic crisis is over and that they will report good increases in profits this year. At the same time, they believe that “internal management challenges” will be the key issue they will face in the coming year.

Those were among the key outcomes of the latest “crisis barometer” conducted by UFI, the Paris-based global exhibition industry association, in June 2010. It was the fifth survey conducted since the global economic crisis hit in 2008 and was answered by 175 companies from 50 countries.

UFI said the current Barometer provides new insights into the impact of the economic crisis on the exhibition industry and confirms the significant differences across various regions of the world identified in the previous results.

Companies were asked whether the impact of the economic crisis on their business was over or not, and to indicate the starting and ending dates of this impact. In all regions, except Asia/Pacific, respondents consider that the impact of the economic crisis is still felt.

This varies, however, from 86% of responses in the Americas, to 80% in Europe and 57% in Middle East / Africa. Asia/Pacific is the only region where a majority of respondents (57%) consider that the impact of the economic crisis is now over.

In terms of ending year, results are more spread out: 72% of respondents in the Americas and 59% in Europe think that the impact will be felt until 2011or 2012. However, 54% of respondents in Asia/Pacific and 50% in Middle East/Africa think that it has already ended in 2009 or it will in 2010.

The report said, “Asia/Pacific exhibition companies, which appeared most strongly hit in 2008 have definitely reached a “bottom-out” in 2009: 76% of respondents experienced an increase in turnover for the first half of 2010 over the same period of 2009, and 87% expect one for the second half of 2010. 77% also already expect an increase for the first half of 2011.”

Asia/Pacific is the only region where a majority of respondents expect an increase by more than 10% of their 2010 annual profit compared to 2008 (54%), the report said.

In the Americas, which experienced an early exposure and an early “bottom-out” effect in 2009, 69 to 70% of respondents experienced an increase in turnover in the first and the second halves of 2010 over the same period of 2009 and 75% expect one for the first half of 2011.

Almost one respondent out of 2 in the Americas, expect their 2010 annual profit to increase by more than 10% compared to 2009 (47% of respondents), but expect it to remain stable (between 10% and +10%) compared to 2008 (48% of respondents). The impact of the economic crisis is still felt by almost all respondents from the Americas (86%) and 62% believe that it will end in 2011 only.

Europe which was more severely hit than Asia/Pacific or the Americas in 2009, also faced a longer delay for recovery: only 41% of respondents experienced an increase in turnover for the first half of 2010 over the same period of 2009, 51% expect an increase for the second half of 2010 and 64% for the first half of 2011.

The 2010 operating profit is expected to be stable (between -10% and +10%) when compared to 2008 for 39% of European respondents and for 52% of them when compared to 2009. However, 80% of respondents consider that the economic crisis still has an impact on their business. 59% of respondents consider that the impact will be felt until 2011 or 2012.

In the Middle East/Africa, a large majority of respondents declared turnover increases. Most companies also forecast a stable 2010 annual profit (between -10% and +10%) compared to 2008 (80% of respondents) or 2009 (67% of respondents). But the impact of the economic crisis is still felt by a majority of respondents (57%). For most of them however the impact will end in 2011 latest.

Finally, companies were asked to identify the three most important issues for the coming year out of a proposed list of seven.

In both the Americas and Europe, the top issue is the “state of the national/regional economy”, followed by the “global economic uncertainty” and then “internal management challenges” (e.g. finance, human resources, staff, training). These same three criteria are listed in Asia/Pacific, but in a different order, as the “internal management challenges” issue is ranked first.

In Middle East/Africa, the “state of the national/regional economy” is not among the top three listed; it is replaced by the “Local/national competition from within the exhibition industry” issue.

Other main issues identified were: “Environmental challenges (customer expectations, regulations, etc.)” which was mentioned by 9% of global respondents; and “Competition from other media (e.g. internet, virtual tradeshows, and social media)” which was mentioned by 9% of the respondents.