That was one of the major findings of the The European Fine Art Foundation’s (TEFAF) annual report on the state of the art market, published earlier this month.
The most in-depth report of its kind, TEFAF’s data come from public auctions as well as information the foundation collected by polling 6,500 art dealers around the world.
TEFAF estimates the value of the global art market declined by around 7 percent last year to U.S. $55.68 billion, down from just over U.S. $60 billion in 2011.
This 7 percent decline was not divided equally among different countries, however. Indeed, art sales in China were valued at just U.S. $12.7 billion last year, a sharp drop of 24 percent from the year before. Auction sales, which had driven growth in recent years, were down by 30 percent. By contrast, the U.S. market grew at a modest 5 percent to U.S. $18.5 billion.
In the five years prior to 2012, art sales had skyrocketed in China, growing by an astonishing 350 percent between 2009 and 2011 alone, according to the data collected by TEFAF. These sales had cushioned the blow the financial crisis had on the industry, and ultimately allowed China to displace the U.S. as the world’s largest art market in 2011.
In describing the factors behind the drop in art sales in China last year, the report says:
“The main reasons for the deceleration in growth were both demand factors (including a slowdown in economic growth and continuing liquidity constraints) and a reduced amount of high quality, high priced works coming onto the market. Many art funds and other speculative investors also reduced their participation in the market during the year.”
Altogether the U.S. share of the global market last year was 33 percent, up from 29 percent in 2011. China’s share of the global market was 25 percent, down 5 percent from the year before.
Zachary Keck is assistant editor for The Diplomat.