The art industry has witnessed an undeniable growth in recent years, propelled by increasing stores of wealth among the wealthiest collectors. According to art economist Clare McAndrew’s report for Art Basel and UBS Group AG, the global art sales hit a record high of $67.8 billion in 2022 and the US market lead the way with the sale of Andy Warhol’s “Shot Sage Blue Marilyn” for $195 million, the second highest sum ever paid for an artwork at auction. Other confirmed high-end sales included the sale of Georges Seurat’s Les Poseuses and Paul Cezanne’s La Montagne Sainte-Victoire, shooting past the $10 million mark.
The demand for lower-end works, however, suggested fear of recession, sky-high inflation and rising interest rates taking a toll on the buying power of those merely affluent. With this, art market began to cool down in the last quarter of 2022.
This echoes the cooled trend in the luxury sector as a whole. After booming stock markets and cryptocurrencies increased wealth in 2021, more people discovered the pleasures of upmarket shopping. But with the slump in tech stocks, Bitcoin and higher borrowing costs, some aspirational buyers began to exercise restraint in their purchases, witnessed in companies from Britain’s Burberry Group Plc to Gucci-owner Kering SA.
Particularly in the world of NFTs, sales of art-related tokens saw an unprecedented surge in 2021 -up to $2.9 billion from $20 million the year before, due to the boisterous embrace of crypto bros. But soon, the boom cooled down in the same year with Ethereum’s fall in price.
China holds the key to transforming both art and luxury. With promising consumer behaviour at Art Basel Hong Kong, buyers continued to stay ahead of the game and make the most out of the post-pandemic era. Despite this, recent banking turmoil and stock market volatility could significantly affect the art market. Time is to be the judge of that.
Burberry Group Plc is renowned for its wear-to-work blazers and double breasted coats in London. It was established in 1856 by Thomas Burberry and has its headquarters in London, England. It is a British multinational luxury fashion house. The company designs and manufactures apparel, accessories, and fragrances for men, women, children, and babies. It also has divisions for eyewear, watches, and jewelry.
Clare McAndrew is a Dublin-based economist and an absolute authority on the art market. She has been involved in data collection and analysis in the contemporary sector since 2001, resulting in her substantial annual reports done on behalf of Art Basel and UBS. She serves as the Founding Director of Arts Economics, her own research consultancy, and has also served as the Commissioner at the 2019 and 2021 Manchester International Festival.