Economist Provides Update on Anticipated Recovery
DALLAS, 22 April 2020 – In a webinar today, the Center for Exhibition Industry Research (CEIR) provided critical insights to the industry from results to a recently-fielded poll in addition to an update from CEIR’s economist, Allen Shaw, Ph.D., Chief Economist for Global Economic Consulting Associates, Inc.
“COVID-19 has had a profound impact on the U.S. business-to-business (B2B) exhibition industry,” noted CEIR CEO Cathy Breden, CMP, CAE, CEM. “The survey providing insights from the B2B exhibition organizer perspective and Dr. Shaw’s insights relating to when the economy is expected to rebound offer a very valuable understanding of where our industry is today, and outlook moving forward.”
B2B Exhibition Organizer Perspectives
This survey was fielded in April, inviting executives with oversight of U.S. B2B exhibitions run or managed by their organizations. It quantifies the impact COVID-19 has had on their staff, operations and events. It also captures areas executives plan to address based on the hard lessons learned by a pandemic that has blindsided economies worldwide. CEIR Vice President of Research Nancy Drapeau, PRC thanks IAEE and TSNN for providing the sample that made this important research possible.
Key Findings of Survey with B2B Exhibition Executives
Organization staff largely remain intact though if the pandemic persists, pay and staff cuts may deepen three to six months out. Today, only 16% of organizers have cut pay and fewer have furloughed or laid off staff.
Executives are working aggressively at revising their budgets (86%), with an aim of containing costs and retaining revenues. The brunt of lost revenues is being passed on to suppliers, via renegotiated (61%), or cancelled contracts (55%). The approach is unfortunately a product of many organizers cancelling, postponing or doing both for B2B exhibitions originally scheduled for 2020. Though the situation is grave, to-date, 2020 is not a complete loss if COVID-19 is brought under control. Results reveal 41% of organizers report postponing events. The bulk are scheduled to take place starting in late summer through November, with roughly 30% per month starting in August while 34% of organizers have postponed events to 2021.
Many hard lessons have been learned from this health crisis that has blindsided the world. It is motivating executives to consider options to ‘pivot’ to alternative event content or models if a physical event is unable to take place in the future due to an unexpected calamity. Results suggest there will be extensive experimentation with virtual options, whether plans will be in place to switch to a digital-only solution or adopt a hybrid event moving forward.
These executives are also very sensitive to the importance of creating and implementing hygiene protocols that make participants feel safe, and are effective in protecting them from the virus. They understand these accommodations are critical to the recovery of the industry once the market for trade shows reopens.
Key Insights from CEIR’s Economist on the U.S. Economy
Dr. Shaw’s analysis focuses on when the U.S. economy is expected to rebound. The reason for this is that the U.S. economy must rebound before the U.S. B2B exhibition industry can reopen and recover. He notes that the economic recovery depends on gaining control of the virus, specifically as tracked by the number of new confirmed COVID-19 cases.
Recent data indicates that new confirmed cases in the U.S. appears to have passed the peak. Because of the lockdown across the country, all economic indicators currently point to a sharp decline in economic activities. An unquestionable recession is upon us. However, as Dr. Shaw noted, “Even though economic indicators are as bad if not worse than those of the Great Depression, the underlying economic fundamentals and causes are different.
“The recession we are experiencing now is caused by a supply shock. By comparison, it was a shock in demand that triggered the Great Depression of the 1930s and Great Recession of 2008. Supply shocks today include the economic lockdown due to stay at home orders, supply-chain disruptions, lower productivity of working staff and mortality.”
Dr. Shaw believes that when the economy reopens, more than half of the problem of the current recession will be solved. With monetary and fiscal policies in place injecting money in the system and pushing up demand for goods and services, and as business and consumer confidence is restoring, Dr. Shaw expects the economy will see a V-shape recovery. A ‘V’ shape suggests a very quick recovery once it begins. CEIR expects a full recovery in eight quarters, with GDP in the fourth quarter of 2021 exceeding the previous peak in the fourth quarter of 2019.
Click here to access the recorded version of the webinar, sponsored by GES, that provides more in-depth look and discussion of survey results as well as Dr. Shaw’s insights relating to the U.S. economy and B2B exhibition industry.
The annual CEIR Predict Conference will be held 21-22 September 2020 at the MGM National Harbor, just outside Washington, D.C. Predict will provide insights into the performance of the exhibitions industry and a forecast through year-end, along with an economic presentation by Alex Chausovsky of ITR Economics discussing how world events are expected to impact the global economy. Registration for the CEIR Predict Conference is now open, complete details are available here.
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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