Market Watch: Market Editor Report June 2024

In June a series of print sales took place. Keith Haring took centre stage at Phillips' Evening & Day Editions sale, alongside Bridget Riley, Roy Lichtenstein, Banksy and Jean-Michel Basquiat. This auction is renowned for featuring works from blue chip artists, offering insights into current market stock. Interestingly, trophy works from the 2023 sales were absent in this event presenting fresh consignments. For a detailed review of all the artworks featured in this sale and their results, refer to our comprehensive market report and listen to MyArtBrokerTalks latest podcast, where I sit down with Jasper Tordoff to discuss the broader impact of sales results on the art market in June.

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MyArtBroker has launched a new series: The Week In Prints: News From The Prints & Editions Market, which will be published weekly, delivering fresh insights and updates on the prints and editions market, including news from sought-after blue chip artists.

Reflecting on the early 2000s, the pivotal event for the art market was the 2008 financial crisis, triggering global public spending cuts that dampened consumer confidence and discretionary spending. Consequently, the art market's trajectory mirrored broader economic conditions, with global sales plunging from $62 billion in 2007 to $39.5 billion in 2009, yet the political landscape shifted in 2010 with David Cameron in the UK and Barack Obama in the US, ushering in a new era of governance and by 2011, global art market sales rebounded to $64.6 billion.

Barack Obama and David Cameron: Shaping The Art Market Beyond Numbers

The 2008 elections in the US and UK had significant implications for their respective art markets. In the US, Obama's election coincided with a period of economic turmoil following the financial crisis. His administration's policies aimed at economic recovery, including stimulus packages and support for the arts, which bolstered consumer confidence and art market sentiment.

Shepard Fairey’s iconic Hope poster famously symbolised Obama’s election campaign, marking it as a cultural phenomenon that showcased his early impact. Throughout his presidency, the Obama administration actively championed federal funding for the arts through agencies such as the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH). This commitment emphasised the significant role of arts and culture in society, leading to heightened recognition and appreciation for contemporary art during his tenure.

Obama's cultural impact extended internationally as well. The Arts Envoy program under the State Department facilitated global cultural exchanges, promoting American art and artists worldwide. These efforts aimed to foster mutual understanding and strengthen diplomatic ties through cultural dialogue strengthening the US’s position in the global art market. After their tenure, Obama and former First Lady Michelle Obama continued their advocacy through initiatives such as the Obama Presidential Centre in Chicago, which plays a pivotal role in promoting arts engagement and education. Moreover, their commissioning of unique presidential portraits by contemporary artists Kehinde Wiley and Amy Sherald marked a significant departure from tradition, showcasing commitment to contemporary artistic expression in the realm of presidential portraiture.

In the UK, Cameron’s leadership as Prime Minister (PM), from 2010 to 2016, was defined by broad economic policies, notably austerity measures aimed at reducing public spending. These policies led to significant cuts in funding for the Arts Council, national museums, and galleries, affecting cultural institutions. Also, while Cameron is associated as a central figure in the Brexit saga, of which the UK art market is still suffering from, his role was complex and blame is nuanced.

Despite these obstacles, London persisted as a global arts hub during Cameron’s tenure, showcasing resilience amid economic pressures. Cameron’s support for the arts included overseeing the 2012 Olympics and Cultural Olympiad, resulting in numerous commissioned artworks and widespread public engagement. Additionally, his backing of street art elevated artist Ben Eine to international acclaim, even earning him recognition in the White House through a gift to the Obamas.

During the administrations, broadly spanning from 2009 to 2017 in the US and the UK, the art market experienced healthy fluctuation among high numbers, particularly showing significant growth from 2009. In 2014, global art market sales reached their highest point in 15 years, marking a period where the prints and editions sector gained substantial recognition and momentum due to high demand for art in general.

However, in 2016 nearing the end of Obama and Cameron’s tenure, global art sales declined by 10% from the previous year to $56.7 billion, though not as low as the $56.7 billion reported in 2012 during the post-financial crisis recovery phase. The decrease in 2016 was attributed to the aftermath of Brexit, which (still) disrupts the UK economy, trade relations, and financial services.

Policy Impact On Global Markets

Despite these challenges, the US and the UK remained central hubs of the art market in 2016, with other European (EU) and Asian markets also experiencing gains from the previous year. However, the past year, 2023, has really started to feel the effects of brexit, evidenced as China pulled ahead of the UK in the global market share in 2013 and other EU countries continue to gain momentum. This highlights how economic policies, including tax measures and funding for cultural institutions, played a significant role in shaping the art market, alongside the influence of elections and policy developments.

Reflecting on these events and policies shaped by elections, it becomes undeniable that attributing market downturns solely to lack of demand is overly simplistic; elections and policy repercussions from current and past administrations play pivotal roles. A telling example resonates with The Guardian's examination of the art market in 2016, highlighting a slowdown in the “cheaper end of the market” that underscores broader global trade dynamics. Intriguing is that today, as discussed by Anders Petterson in a recent ArtTactic podcast, contraction is observed at the higher end of the market, while day sales and print sales remain relatively stable. This nuanced understanding echoes the art market analysis surrounding Art Basel presented earlier in this article, emphasising the need to consider multifaceted factors beyond numerical metrics when interpreting market dynamics.

The art market defies simple categorisation; it's an interconnected ecosystem influenced by societal dynamics and economic fluctuations.

Donald Trump vs. Theresa May: Disruptive Policies and Economic Uncertainty

During the tenures of Donald Trump and Theresa May, both leaders made notable impacts on the global art market, each in nuanced and controversial ways. Trump's presidency significantly influenced the art market through direct policies and broader economic effects. His administration implemented aggressive trade policies, such as tariffs on Chinese goods, which affected international trade and increased costs for collectors, galleries, and auction houses involved in global transactions. A 25% import duty on printed works entering the US was also imposed, altering buying and selling dynamics. In a broader sense, these policies reshape preferences at art fairs like Frieze and Paris+, influencing where collectors seek advantageous tax/VAT conditions and auction house transactions, thereby affecting investor confidence and high-value art sales.

Trump's stringent immigration policies, which remain a key focus of the Republican candidate's November 2024 election campaign, ignited controversy and heightened apprehensions regarding inclusivity within the global art community. These restrictions affected international artists, curators, and collectors participating in US exhibitions, art fairs, and auctions, impacting the diversity and vibrancy of the art market. Many artists responded to these divisions through their work, reflecting and critiquing the political climate, which shaped artistic expression and themes in Contemporary art. Ultimately, Trump's presidency heightened cultural and political divisions domestically and internationally, influencing perceptions of American art and culture in the global marketplace.

During the same period in the UK, May's tenure as PM was dominated by the complexities of Brexit. Her administration's negotiations for Britain's departure from the EU introduced considerable uncertainty into both the UK and EU art markets. Without a clear trade deal, Brexit posed a threat to the free movement of art disrupting cross-border sales, exhibitions, and collaborations. Economically, under May's leadership, Brexit negotiations affected consumer confidence within the luxury assets and art sectors.

Many artists and creatives expressed strong opposition to Brexit, arguing that the UK was stronger and safer within the EU. Damien Hirst, for example, released an edition print in three colourways with his signature blue butterflies spelling out the word, “IN” taking to instagram that "Britain is stronger and safer in the EU." Arts patron, Hans Ulrich Obrist also delivered the same sentiment at Frieze Art Fair with predictable warnings asserting, “Britain's potential exit from the European Union signifies a backward-looking mindset rather than forward-thinking.”

Once again, using art fairs and attendance numbers as an example, Paris+ debuted in 2022 to enthusiastic success, overlooking 2023’s bed bug incident, while this year's Art Basel also received positive reception. What makes this discussion intriguing is that Frieze London garnered somewhat disappointing reviews in 2023. Of course, the theme of this newsletter underscores the nuanced nature of the art market, where its fate cannot be attributed to a single factor. However, it is compelling to consider that attendees at Frieze London's anniversary edition were deterred by Brexit and high VAT implications, a pattern that we are seeing echoed in the recent June marquee sales results.
For an in-depth look at the financial shifts following the UK's October 30th budget announcement, under current Prime Minister Keir Starmer, refer to our recent October market report.

Moving into the current landscape, preparations are underway for impending changes. In the US, Joe Biden assumed the presidency in 2021 amidst efforts to revive the economy following the downturn caused by the COVID pandemic. His administration has focused on stabilising the US economy post-pandemic and managing macroeconomic tensions stemming from conflicts in Ukraine and Gaza, as well as global inflationary pressures.

In the UK, Boris Johnson's tenure as PM was marked by his staunch advocacy for Brexit and its subsequent implementation. The UK's withdrawal from the EU have introduced economic volatility and currency fluctuations, significantly impacting international art trade and pricing dynamics. With the recent, and rapid, transition in leadership from Johnson to Liz Truss, and then Rishi Sunak, the ongoing effects on the art market remain uncertain. Yet, the anticipated landslide victory of the Labour Party in the upcoming majority vote is expected to have a profound influence on the art market's trajectory beyond the foreseeable future.

July 4th Election and Manifestos

According to TAN, The Labour Party's current manifesto for the July 4th election will focus on supporting regional museums and improving access to cultural assets through increased loans from publicly funded national museums and galleries. The Conservative Party's manifesto emphasises protecting public monuments amidst calls for the removal of those associated with Britain’s colonial past, views shared by the Republican Party in the US.

On the other hand, UK Liberal Democrats are focused on the government's management of cultural issues during Brexit, particularly regarding proposals for free short-term travel arrangements for UK and EU artists, among other related initiatives. The Green Party echoes similar priorities, advocating for visa-free access into the EU for artists.

My prevailing view is that the art market is constantly evolving through different interconnected sectors. In the upcoming elections, advocates for the arts are pressing for equal recognition alongside STEM in education. While each PM has contributed to the arts and culture sector in various ways, there remains a persistent argument that these efforts fall short. This sentiment was underscored in January 2023 when Sunak, as PM, announced plans to extend math education in England, prioritising numeracy skills for the modern workforce. However, questions persist about the equal emphasis on humanities and critical thinking skills.

Today's understanding of the art market goes beyond mere sales figures; it is intricately influenced by the interplay of economics, politics, and culture. With political landscapes in flux and economic uncertainties, the art market must prioritise innovation and adapt to trends like art tech, online and private sales, and emerging mediums to navigate these changes effectively. The evolving global art ecosystem demands nuanced insights into how these factors intersect, guiding future strategies amidst dynamic challenges and opportunities.