The art market appears to be in decline. After years of rapid climbs, confidence appears to be turning. Despite strong performances at the Christie’s and Sotheby’s New York auctions in May 2008, the rising price of oil, general global economic squeeze and the natural pressure on a market that has grown aggressively appear to be constraining art market growth.
According to the Artprice Art Market Confidence Index® (AMCI), confidence has declined slowly since the index reached a peak of +31 in May. Currently, the AMCI, which has a scale of -100 to +100, has a value of +7.7, suggesting that the players in this market are a bit concerned about future pricing. Of course, this is hardly surprising, given that art prices have swelled substantially.
The index hit a recent low of -14.4 in January but quickly recovered based on art sales in the first half of the year. Following the May auctions, though, sentiment has eroded, as the AMCI fell to its current level from +24.3 on June 9, 2008.
Based on a benchmark value of 100 in 1990, the Artprice Global Index had increased by 28 percent as of July 1, 2008, though growth in US Dollar terms was really 75 percent (accounting for exchange rates between this currency and the Great Britain Pound). “Art work purchase intentions,” according to Artprice, “look to be in a freefall.” Pessimism regarding the global financial situation is finally putting the squeeze on art prices, despite the fact that this market generally consists of higher net worth individuals.