News
15.03.2010The KME View: How full is the half empty glass?
Sector-related global top management poll
The global economy is currently rebounding, but there are significant differences in regional developments, also affecting the exhibition industry.
“We are not in year one after the crisis, but in the third crisis year”, this was the assessment of Axel Weber, Head of the German Bundesbank at the latest World Economic Forum in Davos in January 2010.
IMF forecast
Whereas Europe and Japan have been extremely hit by the financial and economic crisis and the recovery is expected to be only moderate in 2010, the US and especially the emerging markets China (see chart below), India (+6,4%), Brazil (+5,2%), Turkey (+3,5%) and to a lower extend Russia (+3%) will benefit from a quicker turnaround of economic figures in the running year.
Growth of GDP in percent Source: IMF International Monetary Fund
The Greek disease
Within the Euro-zone the latest disaster of the Greek national finances brought to light how volatile the total situation is, even in the “old Europe”. Do we really see the light at the end of this tunnel?
Global top management survey
Did your industry sector gain or loose faith in the public opinion since the beginning of the financial crises? This question was answered by around 1,200 top managers on a global basis. Please view the interesting results on a sector-to-sector basis at the end of this article.
Historical experiences appear to be reconfirmed whereby heavy financial crises do not come along with a rapid recovery. Fiscal systems remain morbid, large national debts turn out to be a horror on the markets, the economy in the industrial nations is just slowly increasing and the highly reflationary monetary policy simultaneously rises the inflationary potential in the long run.
Germany - no longer export world champion
In the recession year 2009 the German exports dropped by 18.4 % to a total of 803 billion Euros (around 1.12 trillion US Dollar), whereas the value of the Chinese exports amounted to 1.2 trillion US Dollar. We are indeed within the Chinese decade now. From 1998 to 2008 the Chinese share of the world trade volume has risen from 3.3 % to 9.1 %, whereas the US figures went down from 12.4 % to 9.1 %. The German share of the cake was relatively stable, going down from
9.9 % (1998) to 9.1 % (2008) only.
Stagnation of German machine building sector
But one of the German model industries, the machine building sector, has gone through a deep valley in 2009 and is expecting a stagnation in production value in 2010 on the level of 151 billion Euros. This means a zero growth compared to 2009.
Consequences for the exhibition industry
There are two possible approaches when it comes to the consequences of the real economic scenario for the participation of companies at trade fairs. On the one hand it is a common saying that trade fairs and exhibitions are mirrors of the
markets, regularly with a time lack of around 6 - 9 months. On the other hand the expert view indicates that trade fairs and exhibitions as marketing media should be used in a counter-cyclical way by interested companies. This means nothing else that the presence within the sector community is even more important for market players during difficult times.
Turnover in the international machine building sector (Change in % compared to 2008) Source: VDMA, estimation 2009
The overall results of the international trade fairs in Germany in the first weeks of the running year 2010 are generally encouraging. There is obviously not much growth, some exhibitions are going down in figures, but we are experiencing a relative stability of the leading events. More than ever it is vital for a show not to be just a me-too product, but the number one or at least number two meeting point of an industry.
The trust-building factor
How can trust between business partners be built? There is only one answer: They need to meet each other personally from time to time. Trade fairs and exhibitions are the optimal media of this personal encounter. This is why they can be hit by economic developments but still keep or even increase their importance for business.
Sector-related survey among top management on a global basis
Did your industry sector gain or loose faith in the public opinion since the beginning of the financial crises?
Worldwide poll of 1,198 top managers (all figures are stated in %) Source: Pricewaterhouse Coopers
