The Pi-eX Auction Market Index, also called the Pi-eX AMI, shows that the art market has already bounced back from its June 2020 bottom.  As the auction houses are getting ready to start the traditionally busy fall season, the question is whether the recovery will continue in the fall, leading to a V-shaped recovery as in 2017 or whether the autumn sales will fall short of the 2019 sales leading to a recurring drop of the Pi-eX AMI and resulting in what would be a W-shaped recovery.

1. The analysis of previous crisis in the art market shows very different recovery profiles:

As shown by the Pi-eX AMI, the 2008-2009 crisis can be characterised by a U-shaped recovery as it saw a steep fall from May 2008 to November 2009, a plateau at the bottom for a few months, followed then by a slow and long recovery period. Only in May 2014 did combined sales at the three leading auction houses reach a level higher than the pre-crisis period back in May 2008. This created what is called a U-shaped recovery.

The 2016-2017 crisis was very different: the drop from June 2015 to February 2017 was less steep but laster longer while the recovery after the market reached its bottom in February 2017 was swift leading to a V-shaped recovery.

2. The current Covid19 crisis added to the downfall already observed since September 2018, but seems to have been short lived:

As highlighted in Pi-eX recent Annual Reports and Quarterly Reports, auction houses had already started to see a contraction in sales since the 4th Quarter of 2018.

The current auction market Covid related crisis, which started in Mid-March 2020 due to the confinement requirements imposed worldwide, accelerated the previous trend as auction houses were unable to arrange live auctions from Mid-March 2020 to beginning of June 2020.  The return of Live auctions in the last month of Q2 2020 brought some much needed revenue and led to an initial bounce back visible in the latest update of the Pi-eX AMI as of August 2020.

3. Will the bounce back continue, leading to a V-shaped recovery or will we see a second drop in autumn pointing towards a W-shaped recovery?

The autumn season is traditionally a very busy season for the art market. From London to Paris, Hong Kong to New York, all key cities see many fairs and auctions being arranged one after another and hundreds of millions of dollars being spent on art and other unique items.

This year however will be very different from last year. Most fairs have been cancelled,few auctions will be Live as most will be purely online.  Even the few Live auctions will probably not look like your traditional Live auction as it is very unlikely that a large public will be invited to watch and bid in the auction room.

What will this mean for the art market?

If buyers embrace the new online formats, trading will continue to increase and the Pi-eX AMI will show a V-shaped recovery.

If buyers do not embrace the new online format or if it takes them longer to embrace it, the Pi-eX AMI will show a second drop pointing then towards a W-shapped recovery.

As the art market is going through unchartered territory, it is more important than ever to track sales at public auctions.   Pi-eX AMI provides monthly readings of the market, allowing art stakeholders and investors to gauge public auction market movements in real time.

For further information on Pi-eX Auction Market Index, consult Pi-eX Research.