Art Market Confidnece High But So is Risk Level

Arttactic recently released its first half 2011 art market confidence report for the US and Europe. Not surprisingly, and consistent with other recent reports on the art market, confidence is high and increasing. As world economic issues and concerns increase, the amount of risk associated with investments in art is increasing as well, and according to Arttactic, their risk barometer is as high as it was in May of 2008 just several months before the Lehmans Brothers collapse.  Keep in mind Arttactic primarily tracks the contemporary art market.

Highlights from the Arttactic art market confidence reports are

Art Market Confidence is up, but increasing fears about the economy could be its undoing

The overall Contemporary Art Market Confidence Indicator sees a positive increase of 8.3% in the first half of 2011

The ArtTactic Auction Market Indicator sees a significant increase of 18.6%. - This is the fifth consecutive increase in the indicator since November 2008, and the last reading is on par with previous results in November 2006 and May 2007.

After dropping 18.1% in the first half of 2010, the Economic component of the ArtTactic Art Market Confidence Indicator drops a further 20.8% in the first half of 2011. Strongly suggesting that the stakes are being raised, and that the risks of a new economic crisis could put a stop to the recent growth in the global art market. This is further supported by the fact that 69% of the respondents see the economic uncertainty in Europe and the possible contagion effect as the greatest risk to today’s art market.

Risk Barometer increases 12.6% on increasing fear that the art market is again becoming vulnerable to the economic uncertainty facing Europe and potentially the global economy. The Risk Barometer is now at the same level as in May 2008, shortly before the Lehman crisis.

The proportion of the respondent believing the market will move up further in the second half of 2011, remains at 36%, which is the same reading as in December 2010. A further 49% of the respondents believe the market direction will be flat over the next 6 months, whilst 15% believe the market will fall (compared to 16% in Dec 2010).

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