Art Economics released its report on the global art market during the recession. It includes data on the growth of the art market through it’s peak in 2007 and into 2009. The blue line in the graph represents the overall volume of transactions in the art market from 2002 in millions. The green bars represent the value of those transactions in millions of Euros.
There are two important observations to make from this graph. The first is that the decline in the global art market from the peak has been steep but not so severe as to reduce value or transactions below=–or even to–2005 levels. That’s important because 2005 was a peak of its own in the three-year trend coming out of the steep post-internet boom recession of 2002. If the art market can consolidate above the 2005 level at is trough, the hypothesis that the art market has entered a new, global phase that offers much greater expansion in terms of both volume and price has some value.
The second important observation from Art Economics’s data is the interplay between value and volume between 2006 and 2007. Notice how the value in 2006 outstrips volume as global liquidity exploded during the period. With more money chasing the same number of objects, values shot up setting the stage for the market’s peak in 2007.
That dynamic can best be seen in this chart that shows the percentage change year over year for both value and volume. The offset between 2006 and 2007–as well as the overall graph–shows how the market overshoots, especially in value.