B2B Exhibition Industry Improved Only Slightly in Q1 but Looks Progressively Brighter from Q2 Onward
DALLAS, 15 June 2021 – The Center for Exhibition Industry Research (CEIR) reports that the U.S. business-to-business (B2B) exhibition industry in the first quarter improved modestly from the previous three quarters. Nonetheless, excluding postponed events, all but 8.7% of events originally scheduled in the first quarter were cancelled. As a result of many cancellations, the CEIR Total Index, a measure of exhibition industry performance, registered a 93.2% decline from a year ago (see Figure 1).
The performance of the U.S. economy was far better, registering the first year-over-year increase of real (inflation-adjusted) GDP since the start of pandemic, albeit a marginal improvement at 0.4%. It increased at an annual rate of 6.4% from the previous quarter, attributable to increases in personal consumption expenditures, nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by increases in imports and decreases in exports and private inventory investment.
Figure 1: Real GDP vs. CEIR Total Index, 2020Q1-2021Q1, Year-over-Year % Change
Many events that happened in the first quarter of 2021 were cancelled in 2020. Thus, to provide a meaningful point of comparison, 2021Q1 events are compared to the results of their 2019 editions to assess changes of growth compared to 2019. Excluding cancelled events, the Total Index for completed events in 2021Q1 dropped by 48.3% from 2019 (see Figure 2). All exhibition metrics for completed events posted sharp declines from 2019. Real Revenues suffered the largest fall of 55.8%, followed by Exhibitors plunging by 54.6%. Attendees decreased 48.5% whereas Net Square Feet (NSF) tumbled 30.8% from the first quarter of 2019.
Figure 2: 2021Q1 CEIR Metrics for the Overall Exhibition Industry Excluding Cancellations, % Change from 2019Q1
The U.S. economy has been growing since May 2020. With a sharp rebound in the third quarter of 2020 and a continued recovery through the first quarter of 2021, real GDP in 2021Q1 was only 0.9% below its peak in the fourth quarter of 2019. Economic activity will accelerate in the second quarter as more people are vaccinated and the impact of the $1.9 trillion COVID relief package starts to kick in. CEIR expects real GDP to surpass its previous peak in the second quarter.
“The strong underlying macroeconomic factors should lay a firm foundation of support to the B2B exhibition industry when state and local governments ease restrictions on group gatherings during the second half of 2021,” said CEIR Economist Allen Shaw, Ph.D., Chief Economist for Global Economic Consulting Associates, Inc.
President Biden set a goal of administering at least one COVID-19 vaccine shot to 70% of U.S. adult population by 4 July. As of 7 June, 63.7% of the adult population had at least one dose of the vaccine. The vaccination progress has varied substantially across states and regions. Nonetheless, the vaccination rate continues trending upward. Other indicators are also pointing to a more positive outlook that bodes well for the trade show industry. TSA check point numbers are improving significantly. The seven-day average ending 7 June jumped 378% from a year ago, though still down by 28.5% compared to the seven-day average ending 7 June 2019.
Also, according to Arrivalist tracking of road trips, driving habits have rebounded to pre-COVID levels. Recent research also indicates consumers’ sentiments for air travel are changing for the better. About three quarters of employers (74%) feel their employees are willing to travel for business in the current environment, up from 65% last month, according to the May 2021 Global Business Travel Association (GBTA) poll of its buyer and procurement members.
A new Freeman survey conducted in April indicates that the timeline for the return to in-person events has moved up, with 85% of attendees and 86% of exhibitors expecting to return to in-person events by the winter of 2021. When surveyed in February, only 74% of attendees and 78% of exhibitors expected to return by the end of year.
“With more states eliminating or easing restrictions on large gatherings, the exhibition industry is finally close to the end of the pandemic tunnel,” said CEIR CEO Cathy Breden, CMP, CAE, CEM. “As the economy enters into an expansion phase and with a majority of the population vaccinated, the recovery of B2B exhibitions should begin by the fourth quarter of this year and gain momentum in 2022.”
About CEIR
The Center for Exhibition Industry Research (CEIR) serves to advance the growth, awareness and value of exhibitions and other face-to-face marketing events by producing and delivering knowledge-based research tools that enable stakeholder organizations to enhance their ability to meet current and emerging customer needs, improve their business performance and strengthen their competitive position. For additional information, visit www.ceir.org.
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