Clare McAndrew, featured on this yr’s Artwork Energy Index, has executed what many thought unimaginable: she quantified the artwork market. Because the founding father of Arts Economics and writer of the annual Artwork Basel and UBS Artwork Market Report, McAndrew has develop into the business’s de facto oracle, translating the artwork world’s opaque dynamics into knowledge factors, patterns and insights. When her report lands every spring, its outcomes ripple throughout the market—from charting the well being of worldwide gross sales, figuring out rising areas and revealing the settlement behind the numbers.
Over 20 years, McAndrew has redefined how the artwork commerce understands itself, making use of the rigor of economics to a sector typically ruled by intuition and notion. Her analyses have proven how concentrated wealth, demographic change and globalization have transformed the market’s energy buildings, and the way resilience more and more comes from its peripheries, not its peaks.
This previous yr was a pivotal one for the worldwide artwork financial system, marked by softening gross sales on the high finish, a surge of exercise within the sub-$50,000 section and a generational shift pushed by Gen Z and girls collectors. New applied sciences, direct-to-artist gross sales and world diversification are remodeling the market’s infrastructure, she reviews, whereas additionally questioning how the boundaries of artwork are outlined as luxurious items and collectibles enter the fold. McAndrew has emerged as an economist who helps markets evolve by revealing how confidence, notion and entry form worth in ways in which pure knowledge can’t.
What do you see as probably the most transformative shift within the artwork world energy dynamics over the previous yr, and the way has it impacted your personal work or technique?
Gross sales within the artwork market for a few years have been pushed by an intense give attention to a really small variety of artists on the excessive finish, which has escalated their costs, whereas creating increased obstacles to entry for brand spanking new artists and a winner-take-all kind market situation, the place the works of probably the most well-known artists are demanded probably the most, whereas rising artists and the galleries and companies that assist them discover it more durable to generate gross sales and construct careers. Alongside this, as most of what the mainstream media reviews on is the multi-million greenback sums paid for this very small variety of artists’ works, new consumers are led to imagine that the artwork market is out of their attain, and which you can solely get a high quality murals you probably have a finances of over $1 million or so, when in reality there are such a lot of different much less publicized artists and works accessible at a lot decrease costs.
These actually high-priced gross sales have been crucial in driving the restoration of the market from the pandemic, significantly gross sales of ultra-contemporary and up to date artwork, which outperformed different segments by a big margin. Nonetheless, a big shift during the last yr is that these are the 2 areas which have now slowed down probably the most. The section of artworks bought for over $10 million has softened each by way of volumes and worth, and a number of the larger companies have come below extra stress than a number of the smaller ones. Whereas this won’t radically remodel the market’s energy dynamics in a single day, it has at the least shifted the main focus away from that very slender excessive finish and the tiny share of artists it helps. Though a number of the latest narrative across the market has been unfavourable—specializing in a scarcity of eight- and nine-digit gross sales—there have really been a rising variety of transactions happening, albeit at cheaper price ranges, which is a constructive growth.
Because the artwork market and business proceed to evolve, what position do you imagine know-how, globalization and altering collector demographics will play in reshaping conventional energy buildings?
My newest report on world gathering highlights the more and more important presence of feminine artists available in the market and the rising affect of ladies as collectors, facilitated partially by shifts within the distribution and development of wealth. Our analysis additionally uncovered the rising dominance of younger Gen Z collectors, who have been probably the most lively throughout lots of the nice artwork and collectibles segments. As wealth shifts in direction of these segments (together with giant vertical and horizontal transfers of inherited wealth), their preferences will develop into extra dominant and the way they wish to purchase and interact with the market can have a better impression.
When it comes to globalization, one of many key components supporting the present measurement and ongoing growth of the market is its more and more world infrastructure, with gross sales of artwork actually all world wide and the emergence of a lot of new artwork markets creating during the last 20 years in Asia, the Center East, Africa and different areas. The worldwide distribution of the artwork market has altered considerably.
From the Sixties, when Paris misplaced its central place within the artwork market, the U.S. dominated gross sales alongside the U.Okay., with London and New York accounting for at the least three-quarters of the market through the Eighties and Nineties. One of many largest adjustments got here round 2004/2005 when China emerged as a world participant, and with an enormous increase in gross sales there whereas the remainder of the world was struggling within the fallout from the World Monetary Disaster (GFC), making it (quickly) the most important market on the earth in 2011 (albeit by a small margin). This was made all of the extra exceptional by the truth that till the dying of Mao in 1976, it had been unlawful to even personal or change artworks in China. This injection of gross sales and the far more world nature of the artwork market have actually protected its combination worth from draw back dangers and helped it bounce again a lot faster from crises and recessions.
Out there recession within the early Nineties, when it was so solely dominated by the united statesand Europe, it took virtually 15 years for the market to get again on its ft, however post-GFC and post-Covid, the bounce again has been a lot faster as gross sales are diversified throughout so many alternative areas and segments.
Wanting forward, what unrealized alternative or unmet want within the artwork ecosystem are you most excited to sort out within the coming yr, and what is going to it take to make that imaginative and prescient a actuality?
There are such a lot of fascinating inquiries to look into about the place the market goes, however from a methodological viewpoint, for my analysis, one in every of them I’m making an attempt to give attention to going ahead pertains to defining the boundaries of the market.
I’ve concentrated most of my analysis on the normal artwork companies (public sale homes and sellers), however there at the moment are much more brokers concerned available in the market—artists are promoting extra immediately, with disintermediation enabled by social media and on-line promoting, collectors promoting immediately to one another, plus different platforms and brokers outdoors of galleries and public sale homes. How we account for and measure these gross sales will develop into more and more vital in understanding the exercise within the sector as a complete, particularly after we’re making an attempt to evaluate its financial and social impression.
There are additionally persevering with adjustments in what’s being bought within the “artwork” market, with an increasing vary of collectibles and luxurious merchandise being bought by sellers and at public sale homes, and even inside “artwork”—new digital mediums and channels for accessing these works. The standard mediums nonetheless dominate by worth for now, however that might change sooner or later, and the way we measure and broaden these boundaries shall be a unbroken focus for my analysis in collaboration with teachers and specialists within the artwork market over the following few years.
What impressed you to wish to convey better transparency and reliability to a subject typically described as opaque, mysterious or relationship-driven?
Once I first began out, my earliest reviews centered on artists, methods they might construct higher careers (and even simply earn a viable earnings) and the way authorities insurance policies would possibly assist or maintain them again. I uncovered early on this analysis that among the finest methods for them to succeed financially was to have a wholesome and lively marketplace for their work, so my analysis pivoted to the artwork commerce.
It turned clear from working with sellers and public sale homes that once they have been approaching governments asking for assist or adjustments in rules to spice up the commerce, the primary questions they’d get requested have been issues like how huge is the market, and the way many individuals does it make use of. There was a evident lack of any of this goal business benchmarking knowledge to reply these questions, which impressed me to attempt to fill these gaps.
Whereas there’s some good, large-scale public knowledge on auctions and exhibitions, lots of the transactions available in the market are personal, so we now have to make use of a really combined methodological method, relying closely on surveys, sentiment testing and different qualitative analysis strategies (alongside quantitative evaluation) to construct a greater image of the market.
I’ve more and more embraced the significance of extra qualitative strategies and subjective experience, which is sort of completely different than once I got here out of academia and believed that quants, knowledge and econometric modelling might resolve many of the market’s issues. All the metrics and analytical instruments which have been developed within the final decade or two within the artwork market are very helpful, as is the growing quantity of knowledge accessible, however their sensible purposes in guiding particular selections have actual limits, particularly for collectors. There’s nonetheless nothing actually to switch the far more subjective recommendation you would possibly get from an artist or vendor or advisor to information the selection of 1 work over one other, so experience and relationships are nonetheless vital.
After years of analyzing cycles of increase, correction and resilience, what have you ever realized about how confidence and optimism—or lack thereof—form the artwork market in a different way than conventional monetary markets?
Confidence is crucial within the artwork market, and it pertains to one in every of its most vital options—that it’s primarily supply-driven. Even when there’s actually robust demand round, there’ll solely ever be a restricted variety of complete works accessible available on the market at any specific cut-off date, for all deceased artists, however for dwelling artists too, the place there are limits on how a lot they will actually “make to order” within the brief run. Moderately than being pushed by the prices of manufacturing or the provision of inputs, artwork costs are pushed by their shortage worth—the issue that will increase their relative worth primarily based on their low or mounted provide. And due to this shortage available in the market, costs for sure works can catapult as much as actually excessive ranges once they come onto the market, as consumers attempt to grasp the actually restricted alternatives to accumulate them.
Issues like commodities are traded nearly each second, however within the artwork market, it’s a lot slower, and lots of works have an extended market cycle. It may be 20 to 40 years earlier than a piece seems once more, and a few by no means do. The truth that alternatives to buy sure works are so restricted provides to the shortage worth, and works which can be recent to market or have been stored in personal collections for years, for instance, can spark a frenzy of curiosity and generate enormous costs once they come up on the market. Elevated provide (works arising on the market) can have a constructive, upward impact on costs (and the worth of aggregated gross sales), which is clearly very completely different from different asset markets the place will increase in provide drive costs downward.
What this implies is that vendor confidence and optimism concerning the market is vital—how potential sellers view the state of the market and whether or not or not they need to put works up on the market actually typically determines what occurs as a lot as or greater than prevailing demand.
On the secondary artwork market, provide is commonly generated by some exogenous occasion (like one of many well-known “d’s”—divorce, catastrophe, dying or debt), however the place there’s a alternative on the timing of the sale, it should typically be right down to perceptions of the energy of the market. The market can actually speak itself out and in of cycles to some extent.
The highest finish of the artwork market is more and more polarised, with a really small variety of artists capturing a big share of worth. What dangers does this focus pose for the long-term resilience of the broader market?
This has been an ongoing concern available in the market with an intense give attention to a really small variety of artists on the excessive finish, which has pushed up their costs, whereas creating increased obstacles to entry for brand spanking new artists and a winner-take-all kind market situation. One solution to scale back danger and search and validation prices for these consumers unfamiliar with the market is to solely buy well-recognized works or these by actually well-known artists.
By doing that, you’re mainly counting on the established preferences of beforehand profitable consumers who’ve already purchased that artist’s work, decreasing their dangers and insecurities about relying by yourself style in making the fitting alternative. Collectively, these risk-reducing strategies have a tendency to strengthen the “celebrity phenomenon” within the artwork market, whereby the works of probably the most well-known artists (dwelling or lifeless) are demanded probably the most and obtain by far the best costs available in the market, whereas rising artists face ever increased hurdles in gaining entry. This isn’t new, and it’s not solely within the artwork market.
Within the Eighties, American economist Sherwin Rosen pioneered the research of the economics of superstars and believed that some celebrity artists or ‘masters’ reached their place justly as a result of they have been extra proficient, however the variations of their expertise versus these much less profitable have been a lot lower than the variations in success. He additionally felt that some have been, in reality, no extra proficient than their less-recognized friends, however their better success was pushed by the necessity of shoppers for widespread tastes and tradition or to “eat as others are consuming.” The issue related to the celebrity ethos within the artwork market is not only that it drives up costs, but in addition that it might deprive different artists of the chance to work by concentrating demand.
Alongside this, plenty of the media give attention to artwork is simply on the multi-million greenback sums paid for a really small variety of artists, so plenty of new consumers can assume that the artwork market is out of their attain, and which you can solely get a high quality murals you probably have a finances of over $1 million or so, when in reality there’s an enormous vary of costs and nice works accessible at a lot decrease ranges.
I’ve been trying, in my analysis, on gathering on the parallel concern within the infrastructure of wealth. Within the artwork market, like different luxurious items, discretionary buying energy is enabled by better wealth, and that in flip empowers development in gross sales. Over the past couple of years, extra wealth has been concentrated within the high 1 % of society and better wealth inequality is commonly linked to stronger buying in luxurious markets throughout areas and over time. The next focus of wealth within the high percentiles has been a key issue driving robust gross sales and rising costs on the high of the artwork market up to now.
Whereas that is most clearly linked to extra buying by the wealthiest in society, who’re extra lively in luxurious markets, inequality may also shift demand in decrease wealth tiers. In some instances, extra unequal societies can create heightened standing competitors and anxiousness as folks develop into extra delicate to their place within the social and financial hierarchy. This could result in better ‘conspicuous consumption’ amongst these in lower-wealth tiers too, as folks attempt to sustain, or bridge the hole, by imitating the lux spending habits of the rich. Whereas this could increase gross sales within the decrease finish of artwork and different luxurious markets, it has a spread of doubtless unfavourable problems, not least being extra shopper borrowing and debt accumulation.
As inequality turns into extra pronounced, it might additionally result in giving up, quite than maintaining, if the notion of upward mobility appears much less hopeful or simply much less enticing. Within the excessive, will increase in inequality might endanger the market’s potential for long-term growth. If shoppers in wealth tiers beneath the very high interact much less—or by no means even begin gathering—the market might slender additional and worth focus extra on the high, and this can be a section that latest years have proven to be extremely vulnerable to wider dangers and development limitations.
On a constructive be aware, whereas the mixture figures present that the market has declined by worth for 2 years, probably the most constructive developments have been the expansion of gross sales on the decrease and extra reasonably priced ends of the market, with the variety of artworks bought for costs within the sub-$50,000 increasing, and proof of success by each sellers and public sale homes in reaching new consumers, giving the market a broader and extra diversified base for gross sales. This doesn’t actually get centered on, although, within the press, which tends to solely have a look at the large figures, that are so skewed by the tiny, slender excessive finish.
With the rise of digital channels, new collectible classes and luxurious merchandise getting into the ‘artwork’ market—and youthful collectors trying past conventional nice artwork, do you will have plans to adapt your analysis and reporting frameworks to seize these newer types of worth and transaction?
Sure, I’m going to be beginning new analysis on the secondary collectibles market that I’m hoping to publish in 2026. It’s an enormous market and there’s robust proof of an enlargement in curiosity on this space over the previous few years, particularly with younger collectors. In my latest analysis on HNW collectors, about 60 % of their spending by worth during the last yr was on nice artwork, and 40 % was on collectibles. For Gen Z collectors, simply over half of the common spend was collectibles, and their ranges have been greater than 5 instances every other era group on issues like collectible luxurious purses and sneakers.
Whereas a number of the diversification in spending is perhaps a response to the unsure atmosphere we’ve been in, it’s additionally a part of a longer-term shift in what folks purchase, but in addition how they entry the market. Throughout the artwork market, we’ve seen an enormous advance in digital gross sales following the pandemic, with e-commerce growing from 9 % of complete gross sales by worth in 2019 to 25 % in 2020. Though this did settle again just a little, the change appears to be extra everlasting, with a share of 18 % final yr, beneath the height, however nonetheless double the share of 2019 or any yr previous to that. It’s fascinating as that is coming alongside better artwork honest attendance and gallery exhibition visits in comparison with previous to the pandemic, so whereas collectors nonetheless wish to go to exhibitions and see works in individual, when concentrating on a selected work to buy, they’ve develop into more and more comfy with doing so on-line.
On-line channels are key entry factors to the marketplace for new consumers too. They’ve been persistently recognized as the primary supply of recent consumers for public sale homes, and virtually half of the gross sales sellers made on-line in 2024 have been to new consumers. The enlargement of the quantity of transactions over the previous few years has been facilitated by better attain by e-commerce, even supposing the highest-value gross sales remained offline.
Exterior the normal artwork market, there are additionally extra gross sales happening immediately with artists, on artist-based platforms and between different personal brokers. Sellers are nonetheless probably the most used channels for getting artwork within the surveys we performed on HNW collectors, however there was an enormous acquire in direct gross sales with artists, with over a 3rd having purchased immediately from the web, by social media or by a go to to their studios.
