Анализ выставочной индустрии от CEIR by Nikolay Ryabtsev

INDEX

Center for Exhibition Industry Research

An Analysis of the 2009 Exhibition Industry and Future Outlook

Title Sponsor

Publishing Sponsor TM

Founding Sponsors TM

CEIR Index Report

FOREWORD The Great Recession of 2008 and 2009 has been described as the most significant economic downturn since the Great Depression that began in 1929. Although the exhibition industry as we know it today did not exist some 80 years ago in the United States, it is hard to imagine that it would have experienced worse declines than those of the past two years. Prior to last year, the largest single year decline ever recorded by the U. S. exhibition industry was 3.1%... and that was in 2008. The 12.5% decline recorded in 2009 and reported in this, the 2010 CEIR Exhibition Industry Index Report (CEIR Index), is four times greater than the downturn the industry experienced in 2008. The 2009 CEIR Index, which reported on the 2008 outcome, predicted that the industry would not grow until well into 2010. When Dr. John Silvia, Chief Economist for Wachovia Bank spoke at the meeting unveiling the first CEIR Index in 2004, he told the audience, “It is not the performance of your sector that is most important; it is the fact that you know how it is performing and can direct energy and resources to the areas that need improvement.” The CEIR Index is one of the tools CEIR provides that are your roadmap to improved performance. To properly utilize this new, 2010 edition, you will want to review the overall analysis of our contributing economists as well as each industry sector that touches your organization. The 2010 CEIR Index provides exhibition industry performance from 2000 to 2009 across 11 key industry sectors. More than 300 events contributed data for this report, and the number of submissions from these business-to-business exhibitions grows each year. The CEIR Index is an extension of the CEIR Exhibition Industry Census (CEIR Census), which was originally conducted in 2000 and repeated in 2005. The CEIR Census provides a wealth of information about the exhibition industry, such as the number of business-to-business and business-to-consumer exhibitions held each year, the breakdown of exhibitions by size and season, the percent of exhibitions owned by associations versus media companies and entrepreneurs and much more. The 2010 update of the CEIR Census is scheduled for publication this fall and may be purchased at www.ceir.org. Because the CEIR Census does not provide any performance indicators or predictive values for the exhibition industry, the CEIR Index was launched in 2004 to fill this very wide gap. Now in its seventh iteration, the CEIR Index is truly the exhibition industry’s tool for measuring performance. Exhibition owners can be confident in using the trend analysis provided in the report to predict industry sector performance in the years ahead. Annual CEIR Index reports and periodic updates of the CEIR Census represent the most significant tools ever produced for the exhibition industry, and your continued support of these reports and other research projects is vital to ensuring a healthy, growing industry. We invite all exhibition organizers to participate in the eighth annual CEIR Index, which will provide analysis through 2010 and will be released in 2011. A sample Data Information Form is located on Page 88 of this report and can be retrieved online at www.ceir.org. In order to be included in the CEIR Index going forward, data for an event must be submitted for the years 2008 through 2010. Additional information on participation requirements is available from Veris Consulting, which collects and sorts the data and calculates the CEIR Index. It is important to note that all data provided is held in strict confidence, and no event-identifiable information will be published. We would like to hear your thoughts on how the Index could be improved to better meet your needs. CEIR is sincerely grateful to the participants and sponsors of this report and to the readers for their continued support of CEIR and the exhibition industry. Sincerely,

Carrie Freeman Parsons 2010 CEIR Chairman

12700 Park Central Drive, Suite 308 Dallas, Texas 75251 U.S.A. © 2010, Center for Exhibition Industry Research CEIR Publications are registered with the Copyright Clearance Center, Inc. All rights reserved.

Telephone: +1 (972) 687-9242 Fax: +1 (972) 692-6020 www.ceir.org FOREWORD

CEIR Index Report

Table of Contents Introduction....................................................................................................................................................................... iii About the CEIR Index......................................................................................................................................................iii About CEIR.....................................................................................................................................................................iii About Veris Consulting, Inc.............................................................................................................................................iii About Alfred P. Sloan Travel and Tourism Industry Center................................................................................................iv About The Jordan, Edmiston Group, Inc. (JEGI), the Title Sponsor....................................................................................iv About Trade Show Executive Magazine, the Publishing Sponsor.....................................................................................iv About the Founding Sponsors of the CEIR Index..............................................................................................................v  The American Business Media (ABM).................................................................................................................v  The Exhibition Industry Foundation (EIF)...................................................................................................... v  The International Association of Exhibitions and Events (IAEE)...................................................................... v  The Professional Convention Management Association (PCMA)..........................................................................v  The Society of Independent Show Organizers (SISO)..........................................................................................v Glossary of Terms...........................................................................................................................................................v Methodology....................................................................................................................................................................... 1 Overall Exhibition Industry................................................................................................................................................. 3 Professional Business Services (BZ Sector)................................................................................................................... 15 Consumer Goods and Retail Trade (CG Sector)............................................................................................................... 21 Sports, Travel, Entertainment, Art and Consumer Services (EN Sector)......................................................................... 27 Food (FD Sector)............................................................................................................................................................... 34 Government, Public and Nonprofit Services (GV Sector)................................................................................................ 40 Building, Construction, Home and Repair (HM Sector)................................................................................................... 46 Industrial/Heavy Machinery and Finished Business Outputs (ID Sector)...................................................................... 53 Communications and Information Technology (IT Sector)............................................................................................. 60 Medical and Health Care (MD Sector).............................................................................................................................. 67 Raw Materials and Science (RM Sector)......................................................................................................................... 73 Transportation (TX Sector)............................................................................................................................................... 79 Appendix 2009 CEIR Index Participants....................................................................................................................................... 85 Data Information Form................................................................................................................................................. 88

TABLE OF CONTENTS

iii

CEIR Index Report

Introduction ABOUT THE CEIR INDEX

ABOUT CEIR

The CEIR Index was developed to provide an objective measure of the annual performance of the exhibition industry. The CEIR Index measures year-over-year changes in four key metrics:

CEIR (www.ceir.org) of Dallas, Texas, is a nonprofit organization that represents the entire exhibition industry. Founded in 1978 as the Trade Show Bureau, CEIR’s mission is to generate research and communications programs that promote the value and benefits of exhibitions as a primary component in a company’s integrated marketing communications program. CEIR is a leading source of research, information and communications regarding exhibitions.

 Net Square Feet of Exhibit Space Sold  Professional Attendees  Exhibiting Companies  Total Event Gross Revenue. The results of these metrics’ performance were calculated from data provided from over 300 events, which were divided into 11 sectors. The data was then aggregated by sector. The year-over-year changes were then translated into an “index value,” using a base value of 100 in the base year of 2000. The 2010 CEIR Index displays and analyzes this data from 2000 through 2009. Veris Consulting, LLC collected all of the event data and created the CEIR Index from the compilation of this data. Rich Harrill, Ph.D., Director of the Alfred P. Sloan Foundation Travel & Tourism Industry Center at the University of South Carolina, wrote the “Economic Overview of 2009” and “2010 Outlook” for the Overall Exhibition Industry and each of the 11 sectors. The Jordan, Edmiston Group, Inc. (JEGI), a leading provider of investment banking services for the media and information industries, utilized its years of experience analyzing the exhibition industry to provide year-overyear analysis of exhibition performance in each of the 11 industry sectors covered in this report. JEGI also oversaw preparation of the full report. Trade Show Executive, a leading magazine for show organizers, provided design services for the infographs and has been very supportive in providing design services and production since the inception of the Index.

PRIMARY GOALS OF CEIR  To advance and expand the exhibition industry  To promote exhibitions and other face-to-face events as a primary marketing tool  To serve a committed and involved membership  To provide comprehensive research and information related to the exhibition industry. ABOUT VERIS CONSULTING, INC. Veris Consulting, Inc., a leading trade show research consultancy, has been the primary research firm for such groundbreaking industry studies as the Center for Exhibition Industry Research’s Index and Census, the Convention Industry Council’s Economic Impact Study, and Destination Marketing Association International’s “ExPact” study. Veris, an EEIAC-certified trade show auditor, also conducts business surveys focusing on financial and operating ratios, compensation and benefits, benchmarking, needs assessments and demographics. Veris’ statistical programs track highly confidential production, sales, inventory and capacity data that is used to monitor and compare performance relative to competitors. Veris has offices in Virginia and New Jersey. (www.verisconsulting.com)

INTRODUCTION

CEIR Index Report

ABOUT ALFRED P. SLOAN TRAVEL AND TOURISM INDUSTRY CENTER The University of South Carolina’s College of Hospitality, Retail and Sport Management prepares students for careers in travel and tourism, events and exhibitions, and destination management and marketing. In 2003, funding through the Alfred P. Sloan Foundation made possible an industry center focusing on travel and tourism. Recognizing that exhibitions are a significant contributor to the overall meetings, incentives, conferences, and events (MICE) economy, the Sloan Travel and Tourism Industry Center has a research focus on the exhibition industry. Without the economic clout of the exhibition industry, many U.S. destinations would be without one of the most consistent performers related to leisure and business travel. Recently, the center conducted a national study on the cost of exhibition participation. In addition to being an industry center focusing on travel and tourism, the Sloan Industry Studies program funds 26 centers at 19 universities across the nation. The first industry center was established in 1990 at MIT. Each center consists of a multidisciplinary group of students and faculty with versatile backgrounds including economics and other business and technical disciplines, as well as students who are studying many aspects of a single industry, which is especially important as it relates to the CEIR Index. Sloan Center associates involved in preparation of the 2010 CEIR Index include Dr. Rich Harrill, Sloan Center Director; Dr. Matt Brown, Project Director; Dr. Mark Nagel, and Dr. Peter W. Cardon. In preparing the 2010 edition of the CEIR Index, the Sloan Travel and Tourism Industry Center added several economists to its team from OSKR, LLC. This firm provides economic and financial consulting in dozens of industries to clients involved in complex litigation, mergers and acquisitions, and business strategy. OSKR’s staff has worked on hundreds of consulting projects in technology, insurance, banking, energy, sports, entertainment, agriculture and transportation. These economists are Dr. Dan Rascher, Andy Schwarz, Doug Kidder, Chris Groves, Lisa Zue, Johnny Chau and Ronald Park. The Industry Center is quickly becoming recognized as a leader in the travel and tourism industry, providing useful, practical and unbiased analyses and cross-industry linkages. The exhibition industry is important to the center’s research program, and the research is a valued resource for the tourism industry and its various segments, including events and exhibitions. It is a recognized partner locally, regionally, nationally and throughout the world.

ABOUT JEGI The Jordan, Edmiston Group, Inc. (JEGI) of New York, N.Y. is the leading provider of independent investment banking services for the Exhibitions and Conferences sector. Since 2000, JEGI has successfully completed more than 70 transactions with a total value in excess of $2 billion, involving more than 1,000 events, for large domestic and international business-to-business and business-toconsumer media corporations, leading private equity firms, and entrepreneurially owned companies. Recent notable transactions include the sale of The Economist Group’s CFO to Seguin Partners; the sale of Reed Business Information’s Television Group to NewBay Media; the sale of dmg world media’s California Gift Show to Merchandise Mart Properties; the sale of Gartner’s Vision Events to United Business Media (UBM); the sale of Fierce Markets to Questex; the sale of Think Service to UBM; the sale of 101 Communications to 1105 Media; the $155 million acquisition of the remaining 51 percent of George Little Management by dmg world media; and many others. For more information, contact Managing Director Richard Mead (richardm@jegi.com) or Chief Marketing Officer Adam Gross (adamg@jegi.com), both at 212-754-0710 or visit JEGI’s Web site at www.jegi.com. ABOUT TRADE SHOW EXECUTIVE MAGAZINE Trade Show Executive magazine (www.tradeshowexecutive.com) of Oceanside, Calif., is an award-winning magazine audited by BPA and the producer of the TSE Gold Gala, honoring the 100 largest shows that set the gold standard for the exposition industry. Now in its 11th year, Trade Show Executive’s mission is to provide news, views and tools to help trade show and event organizers grow, increase profits and enhance customer satisfaction. Trade Show Executive is a sponsor of numerous industry events and its editors have served on the boards of directors and foundations of the International Association of Exhibitions and Events, the Trade Show Exhibitors Association, the Center for Exhibition Industry Research and the Exhibit Designers and Producers Association. In the past five years, Trade Show Executive was honored with 31 editorial and design awards from the leading publishing industry associations.

INTRODUCTION

CEIR Index Report

FOUNDING SPONSORS OF THE CEIR INDEX  The American Business Media (ABM), which was founded in 1906, is the association for businessto-business information providers, including producers of print publications, Web sites, exhibitions and other media.  The Exhibition Industry Foundation (EIF) was formed in 2003 from the two existing foundations of the International Association of Exhibitions and Events (IAEE) and CEIR. Through the consolidation of these two foundations, a single, stronger foundation was created to promote the exhibition industry.  The International Association of Exhibitions and Events (IAEE) was organized by exhibition organizers and exhibition managers in 1928 as the National Association of Exposition Management (NAEM). As the industry evolved, the association expanded and today serves as the leading voice for professionals in the exhibitions and events industry. Currently, IAEE is composed of 1,400 member organizations which represent more than 8,000 individuals who plan, manage and support exhibitions and events around the world.  The Professional Convention Management Association (PCMA) Education Foundation was established in 1985 and supports educational initiatives to advance meetings management professionals in the conference and exhibition industry. In addition to funding ongoing research to identify key industry issues, the PCMA Education Foundation provides grants for educational programs within the conference and exhibition industry.

GLOSSARY OF TERMS Attendees: Number of professionals or “buyers” attending an event. For business-to-business exhibitions, this number excludes exhibiting company personnel, friends and family and other non-business attendees. Business-to-Business Exhibitions: Exhibitions produced for the primary purpose of displaying products and services for use by businesses and government. These events are industry specific and are not open to the public. Business-to-Consumer Exhibitions: These events are open to the public and display goods and services of interest to the consumer market. Exhibition: An event with 3,000 or more net square feet of exhibit space and 10 or more exhibiting companies. Exhibitors: Number of companies and other organizations occupying exhibit space at an exhibition. This includes exhibit space traded for in-kind services and other noncash consideration. Net Square Feet (NSF): Exhibition space sold for revenue or in-kind services (does not include aisle space or meeting rooms). Revenue: Gross exhibition revenue generated from all sources, including the sale of exhibit space, conference fees, advertising, sponsorships and other sources. Total: The non-weighted average of the four CEIR Index component values – NSF, Exhibitors, Attendance and Revenue.

 The Society of Independent Show Organizers (SISO) is an organization exclusively dedicated to meeting the needs of for-profit exhibition producers, CEOs and senior management. SISO provides the opportunity and forum for producers of exhibitions and conferences to maximize profit potential and growth through peer support, strategic positioning, networking, educational programs, research studies and communications.

INTRODUCTION

CEIR Index Report

Methodology The CEIR Index is designed to be representative of the entire universe of business-to-business exhibitions. Exhibitions are defined as any event with at least 3,000 NSF of exhibit space and 10 or more exhibiting companies. The basis for this universe is the Exhibition Industry Census, which catalogued over 13,000 events, of which approximately 10,000 are business-to-business exhibitions, comprising (in round numbers):

COLLECTION OF DATA Veris Consulting collected the data with the goal of compiling results for each year an event was held between 2000 and 2009. For the majority of the events, Veris Consulting was able to collect data for all eight years. The data comprised the following six key pieces of information:  Event Date

 NSF – 500 million

 Event Location (City, State)

 Attendees – 60 million

 Total NSF of Exhibit Space

 Exhibitors – 1.5 million

 Total Exhibiting Companies

 Revenue – $11.2 billion.

 Total Professional Attendance

The remaining 3,000+ events are business-toconsumer shows. The CEIR Index is designed to offer a representative sample across 11 industry sectors. The universe of 10,000 business-to-business exhibitions is broken out in the table below.

 Total Revenue. Completed surveys were returned to Veris Consulting and each event was placed in a “sector” based on an extensive list of sub-categories that make up each top-level sector. The data was then entered into a database and reviewed for completeness, data quality and reasonableness. The data was also reviewed in the aggregate to ensure there was a statistically significant sample in each sector.

THE UNIVERSE OF BUSINESS-TO-BUSINESS EXHIBITIONS UNIVERSE INDUSTRY SECTOR

# of Events

% of Total

1,440

14.4%

Professional Business Services

Consumer Goods and Retail Trade

580

5.8%

Sports, Travel, Entertainment, Art and Consumer Services

920

9.2%

Food

370

3.7%

Government, Public and Nonprofit Services

1,190

11.9%

Building, Construction, Home and Repair

240

2.4%

Industrial/Heavy Machinery and Finished Business Inputs

440

4.4%

Communications and Information Technology

1,270

12.7%

Medical and Health Care

2,340

23.4%

Raw Materials and Science

810

8.1%

Transportation

390

3.9%

10,000

100.0%

TOTAL EVENTS Source: CEIR Exhibition Industry Census 2000

METHODOLOGY

CEIR Index Report

YEAR-OVER-YEAR PERCENT CHANGE

OUTLIERS

The building blocks for the CEIR Index are the percent change numbers (year-over-year) in each of the four metrics for an individual event. Therefore, only events that have data points in consecutive years can be included. More than 90 percent of the events surveyed were held on an annual basis. For events that were held biennially, Veris Consulting interpolated the data for the “in-between” year. For example, if an event reported NSF of 7,000 in 2005 and 9,000 in 2007, Veris Consulting estimated NSF of 8,000 for 2006. This enabled biennial events to be included in the CEIR Index. Any event held less often than biennially was not included. Next, for each “pair” of numbers (the same metric for the same event in two consecutive years), a percent change value was calculated. For example, if an event’s professional attendance went from 12,000 in 2005 to 13,200 in 2007, a percentage change of +10 percent was recorded. For revenue, the only metric measured in dollars, inflation was taken into account in the percent change calculation. The following inflation rates were used:

For the CEIR Index, outliers are considered any year-overyear change of more than +100 percent or less than -50 percent. To prevent an outlier from significantly skewing the CEIR Index or a sector within the index, year-over-year percent change values for any metric were capped at +100 percent or -50 percent. For example, if an event’s attendance increased by 150 percent, from 1,000 in 2006 to 2,500 in 2007, the change was capped at the maximum value of +100 percent. Less than 0.2 percent of all yearover-year percent change values fell outside this range and required adjustment.

YEAR

INFLATION RATE

2000 to 2001

2.80%

2001 to 2002

1.60%

2002 to 2003

2.20%

2003 to 2004

2.60%

2004 to 2005

3.30%

2005 to 2006

3.10%

2006 to 2007

2.80%

2007 to 2008

3.70%

2008 to 2009

-0.65%

Source: Oregon State University

WEIGHTS APPLIED TO OVERALL CEIR INDEX CALCULATION As shown in an earlier table, each sector represents a percentage of the total universe of exhibitions. For example, Professional Business Services represents 14.4 percent of the total universe of exhibitions. However, if data submitted within a sector represented less than the percentage of the total universe of exhibitions, statistical weights were applied to bring the sector in line with its percentage. For example, only 17 Professional Business Services events reported NSF for 2000 and 2001, while the total number of events that reported NSF over this twoyear period was 202. As a result, Professional Business Services represented only 8.4 percent of the events to report NSF during this period, far below its representation in the total universe of exhibitions. As a result, a weight of 1.73 (14.5 percent/8.4 percent) was applied to the NSF percentage change for Professional Business Services. Under-represented classifications have weights greater than 1.00, and over-represented classifications have weights under 1.00. These weights were only used in calculating the overall CEIR Index and were not used in the breakdown by sector. FOUR COMPONENTS MAKE THE AVERAGE For each year, the four component CEIR Index values – NSF, Exhibitors, Attendance and Revenue – are calculated independently from each other. The average of these four values is used to calculate the fifth CEIR Index value called “Total.”

METHODOLOGY

CEIR Index Report

Overall Exhibition Industry The following graph shows the CEIR Index metrics for the overall exhibition industry from 2000 to 2009.

Performance Overview  The U.S. economy began to show signs of recovery in late 2009, as GDP grew in both the third and fourth quarters of the year.  The exhibition industry followed the rebounding U.S. economy. While the industry was down in the first three quarters of 2009, it showed some improvement in Q4. The exhibition industry declined for the second straight year in 2009, decreasing (12.5%) as compared to 2008, according to the CEIR Index. Over the same period, Gross Domestic Product (GDP) was down (2.4%). Despite the loss in GDP last year, the U.S. economy has been in recovery since mid-2009, and GDP grew over the last two quarters of the year. There are still fears, however, among some economists, of a “double dip” recession, as the unemployment rate is expected to remain high throughout 2010.

During the first quarter of 2009, GDP decreased (6.4%), but the second quarter of 2009 was the last for GDP loss, at a rate of (0.7%). GDP increased 2.2% in the third quarter of 2009 and expanded more rapidly in the fourth quarter, by 5.9% on an annualized basis. GDP began to rebound in the third quarter partially due to spending on new cars and trucks, resulting from the federal “Cash for Clunkers” program, which was in effect for July and August. According to the Department of Transportation, 690,114 old cars and trucks were traded in for new ones over the two-month period, costing the federal government approximately $2.9 billion. Under the program, cars and trucks purchased were eligible for a refund voucher worth between $3,500 and $4,500, if an eligible car or truck was traded in at the time of purchase.

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

The following graph shows U.S. GDP v. Exhibition Industry performance on an annual basis from 2000 to 2009. The exhibition industry tends to track fairly well with GDP on a year-over-year percentage change basis.

CEIR Index Results Compared to U.S. GDP 6.0%

(GDP % Change)

4.0% 2.0% 0.0%

-6.0% -8.0%

-2.0% -4.0%

(CEIR Index % Change)

8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0%

-10.0% -12.0% 2000

2001

2002

2003

2004

GDP % Change

The 2009 quarterly results for the overall exhibition industry reflected the quarterly pattern of GDP, as the industry contracted over each of the first three quarters of the year, down (4.5%) in Q1, (8.8%) in Q2, and (11.1%) in Q3, before rising 17.7% in Q4. However, on a year-over-year basis, Q4 2009 was down (8.9%) versus Q4 2008. Additionally, all four key industry metrics declined in Q4 2009 versus Q4 2008: NSF, Exhibitors, Attendees and Revenue were down (12.3%), (5.8%), (4.1%), and (13.2%), respectively.

2005

2006

2007

2008

2009

-14.0%

CEIR Index % Change

All 11 industry sectors measured by the CEIR Index declined in 2009. GV (the Government, Public and Nonprofit Services sector) was the best performing sector, having declined only (0.4%) in 2009 versus 2008. The other 10 sectors decreased between (3.7%) and (16%) in 2009. The MD (Medical and Health Care) and GV sectors were the only ones with growth in any metric in 2009: MD Revenue was up 1.2%, and GV Exhibitors and Attendees were up 2.9% and 5.9% respectively.

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

OVERALL ECONOMY Unquestionably, 2009 was a historically challenging year for the economy. Even the incredibly resilient exhibition industry could not escape the impact of what has been labeled the Great Recession. The exhibition industry suffered its second consecutive declining year, but, more remarkably, the 2009 year-over-year decline of 12.5% is four times greater than in any prior year. As the exhibition industry begins a new year, after seven consecutive negative quarters, the industry is poised to launch a recovery. The ability to recover will likely depend on what happens to the economy, which will be contingent on many of the factors analyzed in the discussion that follows. The Economy: What Is a Healthy Economy? Most economists view a healthy economy as one that does not grow fast enough to cause inflation, nor slow enough to cause a recession. Typically, economists agree that the ideal Gross Domestic Product (GDP) growth rate ranges between 2% and 3.5%. During the economic downturn that began December 2007 and lasted approximately 20 months, quarterly GDP growth ranged from an increase of 1.5% to a decrease of (6.4%). Growth was not fast enough to avoid a recession. In a healthy economy, consumer and business spending leads to job creation and low unemployment (approximately 5%). Therefore, today’s economy will fully recover only when the enhanced levels of government spending provided by various stimulus programs is replaced by increases in consumer and business spending. Economic Indicators: What Is Looked At and Why? Economists monitor changes in several key indicators to forecast the future health of an economy, including changes in stock market indices, manufacturing and trade inventories and sales, advanced monthly sales for retail and food services, information sector revenue, international trade, monthly wholesale trade, new orders for manufactured goods, construction activity, orders for manufactured durable goods, sales of new homes, housing starts, housing vacancies, changes in retail trade, and changes in manufacturing, mining and trade. Additionally, economists monitor changes in inflation and prices, employment/ unemployment, pay and benefits, productivity, and trade.

Given the breadth of indicators that economists are faced with analyzing to determine what a healthy economy looks like, it is no wonder why many of them fail to accurately predict an economy’s performance. Additionally, it is more than likely that some of these indicators will be moving in different directions – some up, some down – raising the question of which ones should be used to validate overall economic health? The Conference Board tries its best to project economic performance by consistently measuring the movement of leading economic indicators through its Leading Economic Index (LEI). Ideally, the leading economic indicators will change before the economy changes, helping to predict the overall health of the economy. These indicators include initial jobless claims, manufacturers’ new orders for consumer goods and materials, building permits, the performance of the S&P 500, and changes in the expectations portion of the Consumer Sentiment Index. Changes in the LEI foretold the Great Recession. In July 2007, the LEI was near 105 and fell to 103 by December, a (1.9%) decline that marked the beginning of the Great Recession. Over the first three months of 2008, the LEI fell an additional (1%) before stabilizing at 102 through June 2008. Then, in July 2008, the LEI began to fall again and continuously dropped through March 2009, decreasing an additional (4.1%) over that period. For the entire 21-month period of decline, the LEI dropped (7.1%) to a low of approximately 98. However, since March 2009, the LEI has increased rapidly, reaching 107.6 in March 2010. Over the six-month period of September 2009 to February 2010, the LEI increased 4.4%. Though the LEI continues to rebound, growth has begun to moderate, with a 0.1% gain in February 2010 after rising 0.3% in January and 1.2% in December. The performance of the LEI indicates to economists that there will likely be moderately improving economic conditions over the next six to nine months.

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Todayâ&#x20AC;&#x2122;s Key Indicators: What Should You Monitor in This Economy? As the Great Recession was triggered by the collapse of the housing market and the impact of that collapse on the financial markets, there are several key economic indicators that must be monitored closely at this time, including those related to housing, employment, personal consumption, inventory investment, manufacturing, and liquidity. Without stronger consumer demand, job growth will remain minimal and the economy will struggle to grow at a healthy rate. Increases in housing and personal consumption will trigger increased manufacturing and inventory investment. In turn, these increases will lead to new job creation, and substantial job creation will trigger more personal spending and be a strong sign that the economy has recovered. However, current high unemployment levels and the tightened restrictions on consumer credit will continue to hinder economic recovery.

Without stronger consumer demand, job growth will remain minimal and the economy will struggle to grow at a healthy rate.

Housing According to the Congressional Budget Office (CBO), housing starts must average 1.5 million units annually to maintain the demand created by population growth. In 2009, there were 554,000 housing starts, significantly lower than the CBOâ&#x20AC;&#x2122;s recommended amount, due to the overabundance of empty homes on the market. According to the CBO, it is estimated that there were two million excess vacant housing units, on average, during the second half of 2009 (see Figure 1). Growth in housing starts will not begin until the excess available housing is absorbed by the marketplace. Congress has acted to stimulate the housing market by offering a tax credit to first-time home buyers through the Worker, Homeownership, and Business Assistance Act of 2009. Qualified first-time home purchasers can receive up to $8,000 for buying a principal residence. A tax credit of $6,500 was authorized for qualified repeat home buyers as well. The number of vacant homes on the market decreased by 187,000 in 2009, due in part to this government program. Additional factors leading to the reduction of vacant homes include significant price adjustments on housing units and historically low mortgage rates.

Figure 1. New Privately Owned Housing Unit Starts and For Sale Housing Vacancies (in Thousands) 2,500

2,000 Housing Starts Vacancies 1,500

1,000

500

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Employment Hiring is often a lagging indicator. During the initial stages of economic recovery, firms increase output first by increasing productivity and the number of hours worked by existing employees. This is reflected in data released by the Bureau of Labor Statistics (BLS), per the chart labeled Figure 2. In 2009, output per hour (productivity) increased 3.8% over 2008 levels, following 2% and lower annual increases from 2005 to 2008. Meanwhile, the unemployment rate reached 9.7% in January 2010, up from 7.7% in January 2009. During the preceding eight years (2000 to 2008), the highest unemployment rate was reached in 2003, of 5.8%. As a result of productivity gains made in 2009, there may be little additional productivity to be had from current employees. Additionally, temporary help has increased 284,300 since September 2009. These measures taken together may indicate job growth is on the horizon. Diane Swonk, chief economist at Mesirow Financial, cautioned, â&#x20AC;&#x153;Creating jobs is tougher in this economy.â&#x20AC;? In the early 1980s, the last time unemployment passed 10%, the recession that led to the high unemployment was caused by increased interest rates used by the Federal Reserve to tame inflation.

To revive the economy, the Federal Reserve reversed course and cut rates. Today, the Federal Reserve has cut rates to near zero and infused the markets with cash. But the financial system is still suffering from its near collapse, and the infusion of cash into the monetary system has not led to an increase in new loans and resulting economic growth. Economists have suggested that the government should do more to create job growth in light of the strains that remain on the financial system. Suggestions for governmental action have included suspending the payroll taxes for both Social Security and Medicare, increasing spending on infrastructure, enacting a flat tax on income, and extending jobless benefits. President Obama and Congress acted, and a new federal jobs bill was signed in March 2010. The $38 billion bill contains a mix of tax breaks ($18 billion) and spending ($20 billion) designed to stimulate private sector hiring. Businesses hiring employees who have been out of work for at least 60 days are exempt from paying the 6.2% Social Security payroll tax on those employees through December 2010. Employers also receive an additional $1,000 tax credit for each worker remaining in his or her position for a full year. The $20 billion increase in spending is for infrastructure improvements, specifically highway and transit programs.

Figure 2. Annual Unemployment Rate in January; Annual % Change in Output per Hour (Productivity)

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

2000

2001

2002

2003

2004

Unemployment Rate

2005

2006

2007

2008

2009

2010

Output per Hour (Productivity)

Source: Bureau of Labor Statistics (BLS) OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Personal Consumption Spending Over the past two years, personal consumption spending has posted negative growth due to increasing unemployment, large decreases in household wealth, and tighter credit conditions. The amount spent on goods showed more than (2%) negative growth in 2008 and just better than (2%) negative growth in 2009. Meanwhile, personal consumption for services was basically flat in 2009 versus 2008 (see Figure 3). As personal consumption is correlated with employment, output in personal consumption expenditures is expected to grow slowly as new jobs are created. However, consumer spending may be weakened as households pare down debt.

Figure 3. Annual % Change in Personal Consumption Expenditures: Total, Goods, Services 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% 2000

2001

2002

2003

2004

Total personal consumption expenditures

2005

2006 Goods

2007

2008

2009

Services

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Consumer Credit Market The American Recovery and Reinvestment Act of 2009 (ARRA) and programs such as “Cash for Clunkers” were designed to increase consumer spending. But changes in the credit markets have created “fiscal strangulation.” As millions of consumers are no longer considered creditworthy, demand for credit has weakened. Household debt, which surged during the housing boom, is now being reduced significantly. According to the Federal Reserve, household debt to disposable income has decreased from 136% to 122% in just over a year. As consumers pay off debt, families are left with little to spend on goods and services. In 2009, consumer credit decreased (4.3%) (see Figure 4).

Figure 4. Annual Percent Change in Consumer Credit 8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0% 2005

2006

2007

2008

2009

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Inventory Investment and Manufacturing In 2008, personal consumption declined and sales decreased, but business inventories continued to rise. In response, businesses reduced production, but historically it takes approximately one year for inventory levels to be reduced to match demand. Total business inventories were down (8.6%) on a year-over-year basis in January 2010. Manufacturersâ&#x20AC;&#x2122; inventories were down (7.5%) and retail trade inventories declined (8.7%) over that same period. Figure 5 depicts historical changes in inventory levels on a year-over-year basis.

Figure 5. January Year-Over-Year Inventory Change (%)

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

2001

2002 Business

2003

2004

2005

2006

Manufacturers

2007

2008

2009

2010

Retail Trade

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Manufacturing Capacity Utilization Typically, as the economy rebounds, U.S. manufacturing capacity utilization increases as inventories are restocked. Increased capacity utilization improves employment and creates new investment opportunities, which then spur the financial markets. This process then feeds the demand for corporate services and other â&#x20AC;&#x153;softâ&#x20AC;? services. A sign that the economy is recovering occurs when manufacturing shipments, orders and inventories increase. Due to the slack in manufacturing capacity created during the Great Recession, it may be some time before capacity rebounds to pre-recession levels (see Figure 6).

Figure 6. Quarterly Capacity Utilization (%) 84.0% 82.0% 80.0% 78.0%

Q1 Q2

76.0%

74.0%

72.0% 70.0% 68.0% 66.0% 64.0% 62.0% 60.0%

2005

2006

2007

2008

2009

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Liquidity in the Credit Market The lack of liquidity in the credit market impacts the growth of small businesses (firms with fewer than 500 employees). According to the U.S. Small Business Administration (SBA), these businesses employ just over 50% of private sector employees. Over the past 15 years, they have generated 64% of new jobs. Whereas large businesses have access to a wide array of credit markets, including the bond market and the commercial paper market to finance growth, small businesses rely on bank financing, which provide nearly 65% of total credit to small businesses, with credit cards accounting for most of the remaining 35%. Commercial bank financing, however, is still challenging to arrange in todayâ&#x20AC;&#x2122;s market, due to tightened lending standards and a generally hesitant lending environment that is risk averse. As a result, small businesses that are under financial pressure are fighting to keep their doors open, never mind taking advantage of growth opportunities, hiring new people, investing in new ideas, etc.

The most recent data (see Figure 7) show that more than 40,000 small businesses went bankrupt in 2008, while only a little over 30,000 new small businesses were created. The end result is a net loss of more than 10,000 small businesses for the year. Compare these results to 2007, when 60,000 more small businesses were created than went bankrupt. It is expected that due to the tight credit market, small business closures will continue to outpace small business openings and that the number of bankruptcy filings will again increase in 2009. Note: 2009 data was not available at the time of this publication.

â&#x20AC;Ś more than 40,000 small businesses went bankrupt in 2008, while only a little over 30,000 new small businesses were created.

Figure 7. Small Business Creation and Closure with Bankruptcies 100,000 90,000 80,000 70,000

Creation

60,000 Bankruptcies

50,000 40,000 30,000 20,000 10,000 0

2004

2005

2006

2007

2008

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

2010 OUTLOOK  It is expected that modest growth in the economy will continue through 2010, with GDP increasing at an annual rate between 2% and 3%.  The unemployment rate was 10% and the underemployment rate was 17.3% at the end of 2009. Without job creation in 2010, economic growth will not be sustained in the long term.  With industry capacity underutilized and a relatively high unemployment rate, the Federal Reserve Bank should maintain low interest rates in the year ahead, which will encourage slow growth. GDP declined (2.4%) in 2009, after being relatively flat in 2008 (up 0.4%). However, the overall U.S. economy appears to have stabilized, after declining five of the past eight quarters. For Q1 2008, GDP declined 0.7%, but GDP grew 1.5% in Q2 2008. GDP then declined each quarter from Q3 2008 through Q2 2009 at rates of (2.7%), (5.4%), (6.4%), and (0.7%) respectively, on a seasonally adjusted annual rate. As reported by the U.S. Census Bureau, many of the most important economic indicators were trending downward for much of the second half of 2008 and the first half of 2009. The economy began to expand during the second half of 2009, following the worst recession in 70 years. GDP growth was 2.2% in Q3 and 5.9% in Q4 on an annualized basis. It is expected that modest growth in the economy will continue through 2010 and that the economy will continue to expand slowly, with GDP growing at an annual rate between 2% and 3%. This growth forecast is based on weighted regressions and the use of historical GDP data and changes in leading economic indicators. Higher rates of GDP growth are unlikely to occur, with the U.S. unemployment rate expected to remain at 10% for most of the first half of 2010, if not the entire year. The December 2009 unemployment rate of 10% reflected a large number of people leaving the workforce. Overall, the U.S. economy shed 4.2 million jobs in 2009, and the U.S. Labor Department’s survey of households indicated that 661,000 people left the workforce in December alone. “2010 is our opportunity year. After a challenging 2009, we can benefit from the U.S. government’s new focus on growing exports, by positioning our shows as opportunities to expand international sales.” – Gary Shapiro, President & CEO, Consumer Electronics Association/CES

Without job creation being stimulated by current governmental economic programs, economic growth will not be sustained in the long term. Also, there were 929,000 discouraged workers who had given up searching for a job, an increase from 642,000 recorded in December 2008. If the broadest measures of unemployment were used – including discouraged workers and those working part-time for economic reasons – the unemployment rate would be 17.3%. Without job creation being stimulated by current governmental economic programs, economic growth will not be sustained in the long term. Although many businesses are expected to begin replenishing inventories that have been kept low due to shrinking demand over the past 18 months, unused industrial capacity will likely be able to satisfy the increased demand without substantial new hiring in the short term. The underutilized industrial capacity and relatively high unemployment rate should encourage the Federal Reserve Bank to maintain low interest rates, which will encourage slow growth. Currently, the overall improvement in the U.S. economy seen over the past few quarters has primarily been due to enhanced government spending. For the economy to fully recover in addition to creating jobs, consumer and business spending must rise to replace government spending. This process, which began slowly at the end of 2009, is likely to continue in 2010, but unlikely to result in significant changes in spending allocations before 2011. In addition, the massive amount of government borrowing to fuel the current spending increases may delay the eventual economic recovery once the economic environment for individuals and businesses has improved. Although higher inflation rates across the entire economy are likely to occur at some point in the future, prices of most goods and services should remain relatively unchanged in 2010, with a slight chance of increases. If the credit markets remain tight and prevent the stimulation of business creation and growth, which ultimately triggers putting people back to work, it is unlikely that the U.S. will experience a significant economic recovery in the short-term.

OVERALL EXHIBITION INDUSTRY

CEIR Index Report

2010 OUTLOOK FOR EXHIBITIONS  The economy is expected to grow modestly in 2010, and the exhibition industry may begin to grow at the end of 2010. However, there are concerns regarding the stability of the forecasted economic expansion.  The exhibition industry has rebounded from previous recessions, though the industry tends to lag behind the economy’s recovery. The 10,000 business-to-business exhibitions will still be affected in the near-term by the Great Recession. However, it is expected that as spending from the American Recovery and Reinvestment Act (ARRA) increases in 2010 and as the government responds with additional stimulus programs, several key exhibition sectors will be positively impacted, as indicated in the sector-by-sector analyses. The Great Recession has led to deflationary fears among economists, and deflation will significantly hinder economic expansion, as companies will be unlikely to increase operations or add workers. In the U.S., industrial capacity was operating at 72.6% in January 2010. This was actually up from the 40-year low of 68.3% reached in June 2009, but is still well below the 40-year monthly average of 81%. With this excess industrial capacity, companies are fearful of losing customers to competitors based on price. Therefore, there is deflationary risk in the economy. According to the Federal Reserve, industrial capacity will not recover fully until 2013. “The CEIR Index has grown from an interesting read at its beginning 10 years ago to an important barometer for the health of the exhibitions industry. Based on the Index’s most recent results, it would appear the industry has reached a bottom and should show marginal improvement over the next 12-24 months. That being said, it is unfortunate that the current economic downturn has returned the overall Index to its baseline levels, last seen when the Index started in 2000.” – Galen Poss, Partner, G2 & Associates Exhibition Industry Rebounded Following Previous Recession The previous U.S. recession, which lasted approximately nine months – from March 2001 to November 2001 – was relatively shallow and brief. Still, it negatively impacted the business-to-business exhibition industry, which declined starting in Q2 2001. By Q3 2001, the industry had decreased (7.7%), and in Q4 2001, the industry posted another (3.3%) decline.

Contraction on a year-over-year basis continued for the exhibition industry through the first three quarters of 2002 until a 3.6% growth rate was reported in Q4 2002. In all, it took approximately three quarters for the exhibition industry to start growing again following the end of the 2001 recession. However, since the 2001 recession was significantly shallower and briefer than the Great Recession, the exhibition industry is expected to take longer to recover in today’s economic environment. With economic forecasters predicting slow growth in 2010, the exhibition industry may not see year-over-year growth until Q4 2010. At the end of 2009, the exhibition industry had declined seven straight quarters on a year-over-year basis. However, Q4 2009 decreased less than the previous quarters, indicating a possibly positive sign. Furthermore, some sub-sectors of the exhibition industry are positioned for more immediate growth due to spending provisions set in the ARRA. For example, billions of dollars are earmarked for projects in education, renewable energy, construction, infrastructure and technology. Additionally, tax cuts contained in the plan are expected to help stimulate consumer spending, and the $75 billion mortgage rescue plan has provided some stability in the housing market, although it is still extremely volatile. Key Trends of the CEIR Index The CEIR Index has now accumulated nine years of data, and some key trends have emerged that are worth watching as potential predictors of what lies ahead:  Attendance (professional attendees) is a leading indicator of recovery and decline.  Two other metrics – Net Square Feet (of space sold) and Revenue – are parallel lagging indicators.  The number of exhibiting companies (Exhibitors) is subject to counting nuances and variations that make it a less important measure of performance.  Three exhibition industry sectors – the BZ (Professional Business Services), CG (Consumer Goods and Retail Trade), and HM (Building, Construction, Home and Repair) sectors – have historically acted as “guideposts” for the overall industry. Since 2000, the industry has followed the same pattern as these sectors in regards to year-over-year performance. However, the exhibitions that serve the industries most impacted by the government stimulus programs may be the best performers in 2010. OVERALL EXHIBITION INDUSTRY

CEIR Index Report

Professional Business Services (BZ Sector) ECONOMIC OVERVIEW OF 2009  Overall, the BZ sector shed 3.1% of its jobs in 2009.  Job growth for the sector was limited to computer systems services, management and technical services, and waste management.  The 2008 stimulus package for the banking industry did not yield the expected positive impact on that sub-sector. Although the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) is forecasting growth in the Professional Business Services sector in the years ahead, it is unlikely that the growth rate will match the rapid expansion of this sector in the late 1990s and early 2000s. In 2009, the sector continued to shed jobs, with unemployment for the sector averaging 10.8%, an increase from 6.5% in 2008 and 5.3% in 2007. In 2009, 542,000 jobs were lost in the BZ sector, representing a 3.1% decline versus 2008, bringing total employment for the sector to 16.8 million. The percentage of jobs lost in this sector was the same as the 2009 total non-farm employment loss of 3.1%. Computer systems services and management and technical services jobs grew 0.7% and 1.3% respectively in 2009, adding a total of 23,700 jobs. The only other sub-sector with job growth was waste management and remediation services, which added 3,100 jobs, representing a 0.9% increase. Overall, the professional and technical services sub-sector lost 191,900 jobs in 2009, a 2.5% decline versus 2008. In addition, the management of companies and enterprises sub-sector lost 68,100 jobs or 3.6%. Finally, the administrative and waste services sub-sector declined by 282,000 or 3.7%. Within finance and insurance, 5.7 million people were employed in December 2009, down nearly 200,000 jobs from December 2008 and representing a year-over-year decline of 3.4%. Of this decrease, 28,200 jobs were lost in commercial banking; 60,400 in securities, commodity contracts and investments; and 46,700 in insurance carriers and related activities.

BZ SECTOR SUB-SECTORS ACCOUNTING 

ADVERTISING & MARKETING 

ARCHITECTURE 

AUDIO VISUAL 

BANKING 

BUSINESS 

ENGINEERING 

FINANCIAL & LEGAL 

INSURANCE 

PLANT ENGINEERING & OPERATIONS 

PRINTING 

SAFETY 

SECURITY

BZ SECTOR

CEIR Index Report

The following two graphs compare the BZ sector performance to the overall exhibition industry performance for the period 2000-2009.

BZ SECTOR

CEIR Index Report

The following table shows the CEIR Index metrics for the overall exhibition industry from 2000 to 2009, with year-overyear percentage change and CAGR from 2000 to 2009. OVERALL EXHIBITION INDUSTRY Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the BZ Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. BZ SECTOR – Professional Business Services Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

NSF

100.0

104.5

4.5

100.2

-4.1

103.0

2.8

98.7

-4.2

107.2

8.6

110.9

3.5 104.1

-6.2

101.0

-3.0

89.1

-11.8 -1.3%

Exhibitors

100.0

100.4

0.4

85.5

-14.9

98.9 15.7

102.9

4.0

105.0

2.1

102.0

-2.8

99.7

-2.3

93.3

-6.4

83.2

-10.8 -2.0%

Attendees

100.0

98.6

-1.4

103.9

5.3

95.6 -8.0

103.3

8.1

107.6

4.2

127.6

18.6 133.6

4.6

128.1

-4.1

110.2

-13.9

1.1%

Revenue

100.0

99.1

-0.9

101.3

2.2

110.4

9.0

114.8

4.0

119.2

3.8

149.3

25.2 157.8

5.7

147.1

-6.8

128.7

-12.5

2.8%

Total

100.0

100.6

0.6

97.7

-2.9

102.0

4.4

104.9

2.9

109.7

4.6

122.0

11.1 122.5

0.5

116.3

-5.1

102.1

-12.2

0.2%

NSF NSF for the BZ sector decreased at a (1.3%) CAGR from 2000 to 2009, underperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (11.8%) in 2009, following decreases of (3%) and (6.2%) in 2008 and 2007, respectively. NSF performance for the BZ sector in 2009 was on par with a (13.9%) decline posted by the overall exhibition industry.

CAGR

Some key insights into the performance of the BZ sector in 2009:  NSF for 94% of all BZ exhibitions was down for the year, and 50% of these shows reported NSF declined more than 10%.  NSF for 63% of BZ events with more than 100,000 net square feet of space declined more than 10%.  NSF for 60% of BZ shows focused on advertising and marketing was down less than 10%.

BZ SECTOR

CEIR Index Report

Exhibitors Exhibitors for the BZ sector declined at a (2%) CAGR from 2000 to 2009 as compared to a (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector declined (10.8%) in 2009 following three consecutive years of annual decreases, including a (6.4%) decline in 2008. Exhibitors performance for the BZ sector in 2009 was similar to the (11.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the BZ sector in 2009:  Exhibitors for 94% of all BZ shows was down, and 47% of these events showed double-digit percentage declines in Exhibitors.  Exhibitors for 100% of the exhibitions focused on advertising and marketing was down less than 10%.  Exhibitors was down less than 10% for 67% of events with more than 25,000 net square feet of space. Attendees Attendees for the BZ sector grew at a 1.1% CAGR from 2000 to 2009, outperforming Attendance for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the BZ sector declined (13.9%) versus 2008, marking the second straight annual decline. The decline in Attendees for the BZ sector in 2009 was larger than the (8.3%) loss posted by the overall exhibition industry. “Canon’s trade show business is very much about connecting suppliers directly with manufacturing design engineers. Canon continues to expand its co-location features at larger regional shows throughout the world, to the benefit of exhibitors and attendees. At the same time, we are helping our exhibitors expand their reach with highly-targeted shows. When we do this right, our shows perform very well. We also see increasing market intelligence as vital to show performance. Canon’s Market Access File, with over one million design engineers and managers worldwide, enables us to target attendee opportunities.” – Charles G. McCurdy, CEO, Canon Communications

Some key insights into the performance of the BZ sector in 2009:  Attendance for 82% of all BZ shows was down, and 65% of these events posted (10+%) yearover-year declines.  Attendance for 80% of the shows focused on advertising and marketing was down more than 10%.  Attendance was down more than 10% for 75% of the largest shows (greater than 100,000 net square feet of space). Revenue Revenue for the BZ sector increased at a CAGR of 2.8% from 2000 to 2009, far outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the BZ sector declined (12.5%) in 2009, following a (6.8%) decrease in 2008 versus 2007. Revenue performance for the BZ sector in 2009 was slightly better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the BZ sector in 2009:  Revenue for 80% of all BZ shows was down, and 50% of these exhibitions showed year-over-year declines of 10+%.  Revenue was down less than 10% for 75% of the exhibitions focused on advertising and marketing. Total 2000–2009: The Total for the BZ sector increased at a CAGR of 0.2% from 2000 to 2009, similar to the performance of the overall exhibition industry, which remained relatively flat over the 10-year period. Growth in Total for the BZ sector was driven by CAGR gains of 2.8% and 1.1% in Revenue and Attendees, respectively, from 2000 to 2009. 2008–2009: The Total for the BZ sector declined (12.2%) in 2009 versus 2008, following a (5.1%) decrease in 2008 over 2007. Before that, the last decline for the sector was in 2002, of (2.9%). Total performance for the BZ sector in 2009 was very similar to the (12.5%) decline posted by the overall exhibition industry. BZ SECTOR

CEIR Index Report

All metrics for the BZ sector posted double-digit percentage decreases in 2009, led by a (13.9%) decline in Attendees. 2010 OUTLOOK  This sector is expected to grow approximately 3.5% in 2010.  Companies have become more inclined to add to the workload of existing employees rather than contracting new work to outside firms, especially in the advertising and marketing sub-sectors.  Several sub-sectors are expected to struggle in 2010, including banking, insurance and legal services. The Professional Business Services sector is highly correlated with the greater U.S. economy, but more volatile. A review of economic indicators shows that companies continue to cut costs in an effort to conserve cash and survive a possible “double-dip” recession. This trend indicates that companies will continue to be reluctant to hire new employees or external service providers to fulfill their needs.

A review of economic indicators shows that companies continue to cut costs in an effort to conserve cash and survive a possible “double-dip” recession. Gross Domestic Product (GDP) is forecast to grow 2.4% during 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, rising from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. Unemployment is expected to remain around 10% in 2010 before falling again the following year. In the Professional and Business Services sector, 22% of employers plan on adding full-time employees, according to CareerBuilder’s 2010 Job Forecast. It is expected that the BZ sector will grow 3.5% in 2010, as a measure of growth for the sector’s portion of GDP. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures and sector data. These findings are consistent with those from other forecasts related to this sector. According to the Institute of Supply Management, revenue for the non-manufacturing sector is expected to increase 1.3% in 2010, compared with a 4.5% decline in 2009.

Many of the sub-sectors, such as the banking industry, will continue to struggle in 2010. Even though some financial services firms earned record profits in 2009, a select number of bank failures and loan defaults are expected in 2010. The insurance sub-sector is expected to be negatively impacted in 2010 by the shaky economy and soft insurance prices. Property and casualty insurers will likely see modest underwriting losses as insurers are forced to pay claims and expenses through lower premium collections. The legal services sub-sector struggled in 2009, as the recession caused the dissolution of several high-profile law firms. Revenue for legal services declined in 2009 as law firm billings dropped 23% from 2007. Law firm revenues are likely to continue to decline in 2010 as the traditional billable-hour model begins to fade out due to increasing pressure for clients to reduce their spending on outside counsel. Additionally, more companies will bring a greater percentage of their legal work in-house. In the advertising and marketing sub-sector, the rate of growth for billings decreased 21% from 2007 to 2009. Online social networking and real-time media channels, such as Facebook and Twitter, have revolutionized the way companies buy advertising and spend their marketing dollars. As the U.S. economy continues to recover from its worst economic downturn in 70 years, companies are turning more than ever before to online media channels for advertising buys of banner ads, viral campaigns on social media sites, paid search efforts, etc. And many smaller companies are managing their online campaigns internally rather than contracting the work to external agencies or marketing firms. In 2009, 20% of employers plan to add social media responsibilities to a current employee, while close to 8% plan to hire someone new to focus on social media. In 2010, advertising prices are expected to stabilize, but companies are likely to continue moving advertising dollars into digital media channels and away from “traditional” advertising vehicles such as newspapers and magazines.

… Companies are turning more than ever before to online media channels for advertising buys of banner ads, viral campaigns on social media sites, paid search efforts, etc.

BZ SECTOR

CEIR Index Report

Overall, the Professional Business Services sector will look to rebound in 2010, as this sector was the top job generator in November 2009, boosted by a surge of temporary-help workers.

Exhibitions in this sector are supported by the ongoing need of many professionals for continuing education and certification programs.

2010 OUTLOOK FOR EXHIBITIONS  Exhibitions in this sector should record modest growth in 2010.  Exhibition growth will be supported by the ongoing need for continuing education and certification programs by professionals in a variety of sub-sectors.  The expected recovery of the banking sub-sector could have a major impact on this sector. The Professional Business Services sector is the second largest grouping of business-to-business exhibitions, with 1,440 exhibitions representing over 14% of the total business-to-business exhibition industry. This sector is sensitive to economic downturns, as seen by its CEIR Index results in 2009. As the economy begins to recover from the effects of the Great Recession, this sector is expected to begin growing once again. However, this growth will likely be modest as companies continue to cut costs in efforts to conserve cash. By reviewing historical information provided by CEIR Index data, an estimation of the Great Recession’s longterm impact on this sector can be forecast. In 2002, following the most recent recession from March 2001 to November 2001, three of the five key metrics for this sector declined, including: Total, down 2.9%; NSF, down 4.1%; and Exhibitors, down 14.9%. By 2003, the Total for the sector had rebounded, but NSF and Exhibitors were still below their 2001 levels even though they had increased for the year. Interestingly, Attendance declined 8.0% in 2003, falling below its 2001 level. By 2005, however, all key metrics for the sector were above their 2001 levels. Another point to note: Revenue for the sector grew throughout the three-year period (2002–2004) following the recession.

As the magnitude of the economic slowdown was much more severe during the Great Recession as compared to the 2001 economic slowdown, a significantly longer recovery time for this sector is expected. Compounding recovery issues for exhibitions in this sector, all five key industry metrics decreased in 2009, whereas only three of the five metrics declined in 2001. Additionally, exhibitions in this sector have seen practically no growth over the past 10 years, with the Total for the sector at near 0% on a CAGR basis. Exhibitions in this sector are supported by the ongoing need of many professionals for continuing education and certification programs. This is true for architects, accountants, financial professionals, lawyers and engineers, and almost every state requires Certified Public Accountants to complete a base number of continuing education units prior to recertification. Engineers and other professionals working in high technology fields, such as biotechnology, rely on continuing education to update their technological knowledge. Professional associations offer a number of courses, seminars and study programs to help members keep abreast of changes in the industry and certification requirements. Government has acted to lessen the impact of the Great Recession. However, the ARRA contained few provisions for this sector, as it primarily benefited the manufacturing, health care, infrastructure, energy and housing markets. The banking industry benefited from an earlier act of Congress, the Economic Stabilization Act of 2008. While it was hoped that services related to the banking industry, which was negatively affected by the credit crisis, would benefit from the increased liquidity provided by Congress, the industry is still struggling to recover. Given the difficulties in the financial markets, banking and financial services will likely remain flat throughout 2010.

… this growth will likely be modest as companies continue to cut costs in efforts to conserve cash.

BZ SECTOR

CEIR Index Report

Consumer Goods and Retail Trade (CG Sector) ECONOMIC OVERVIEW OF 2009  Exhibition performance in the Consumer Goods and Retail Trade sector declined for the second year in a row in 2009.  The slight economic improvements made at the end of 2009 indicate potential stabilization in the overall economy and the consumer goods and retail trade sector. Exhibitions in the Consumer Goods and Retail Trade sector experienced significant declines in Net Square Footage (15.8%), Exhibitors (15.1%), Attendance (11.7%), and Revenue (21.2%) in 2009. The overall poor economic climate caused consumers to continue to postpone or delay purchases, which corresponded with a contraction of exhibition space, attendance and revenue in this sector. According to the U.S. Bureau of Labor Statistics, the retail trade industry employed 14.6 million workers in December 2009, down from 15 million in December 2008 and 15.6 million in December 2007 (seasonally adjusted). The unemployment rate for the retail trade industry was 9.3% in December 2009, lower than the unemployment rate for the entire U.S. and down from 9.6% in November and 10% in October. Although the overall number of employees in the retail sector declined from 2008 to 2009, some of the subsectors actually saw an increase in the number of employees in December 2009, including automobile dealerships (gained 2,400 employees), building material stores (3,500 employees), health and personal care stores (3,700 employees), gasoline stations (500 employees), and non-store retailers (2,500 employees). More importantly, the majority of the other sub-sectors in the retail sector experienced smaller employment reductions in the second half of 2009 as compared to the first half. The decreased rate of unemployment growth coincided with an increase in the U.S. Gross Domestic Product (GDP) during Q3 2009. According to the Bureau of Economic Analysis (BEA), Q3 GDP increased 2.2%, after having declined 0.7% during Q2. Increases in personal consumption expenditures across a variety of industries, along with increased federal government spending and subsidies, helped spur short-term GDP expansion. Motor vehicle sales increased GDP by 1.5% in Q3, as more than 450,000 automotive dealer transactions were processed as part of the “Cash for Clunkers” program.

CG SECTOR SUB-SECTORS APPAREL 

GIFTS 

hardware 

housewares 

jewelry 

laundry & Dry cleaning 

leather goods & luggage 

lighting 

office equipment & supplies 

photography Reflecting the growing GDP, personal income increased 0.4% in November 2009 after increasing 0.3% in October 2009. Real disposable personal income (DPI), which is adjusted for inflation, increased 0.5% in November 2009 after increasing 0.5% in October 2009. The increases in personal income coincided with a $1.6 billion increase in wages and salaries in November 2009 after a $3.2 billion increase in October 2009. November 2009 wages and salaries increased at a higher rate in all industries except government, where the November increase of $1.7 billion was smaller than the $2.8 billion increase in October 2009. Corporate profits increased $132.4 billion in Q3 2009 after increasing $43.8 billion in Q2.

CG SECTOR

CEIR Index Report

The following two graphs compare the CG sector performance to the overall exhibition industry performance for the period 2000-2009.

CG SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the CG Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. CG SECTOR â&#x20AC;&#x201C; Consumer Goods and Retail Trade Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

NSF

100.0

97.4

-2.6

91.1

-6.4

89.4

-1.9

90.7

1.5

95.5

5.3

95.1

-0.4

91.3

-4.0

84.6

-7.4

71.2

-15.8 -3.7%

Exhibitors

100.0

94.2

-5.8

87.5

-7.1

82.2

-6.1

87.4

6.3

90.6

3.7

87.7

-3.2

85.4

-2.6

78.2

-8.4

66.4

-15.1 -4.4%

Attendees

100.0

96.2

-3.8

90.8

-5.6

95.4

5.1

100.4

5.2

101.8

1.3

101.2

-0.6

109.7

8.4

106.1

-3.3

93.6

-11.7 -0.7%

Revenue

100.0

97.8

-2.2

93.3

-4.6

86.6

-7.2

86.8

0.2

94.4

8.8

98.6

4.5

103.3

4.7

93.9

-9.0

74.1

-21.2 -3.3%

Total

100.0

96.4

-3.6

90.7

-5.9

88.4

-2.5

91.3

3.3

95.6

4.7

95.6

0.1

97.2

1.6

90.4

-7.0

75.9

-16.0 -3.0%

Coinciding with the improved economic indicators, the U.S. Department of Commerce reported that sales at U.S. retailers increased 1.3% in November after increasing 1.1% in October 2009. Most economists had projected an increase of 0.7%. Retail sales were up 1.9% compared with November 2008, the first year-over-year gain since August 2008. Initial reports from the 2009 holiday sales season indicated greater retail activity and sales than in 2008. Although overall sales were not expected to reach 2006 or 2007 levels, an increase of 3.6% from 2008 was realized. Online retailers reported higher initial holiday sales in 2009 than in 2008 and continued to increase their share of the retail market.

CAGR

Despite increases in economic activity and retail sales, prices for consumers remained unchanged. The BLS reported that the Consumer Price Index (CPI) increased 0.4% in November 2009, but the CPI was unchanged from October figures once food and energy were removed from the analysis. The improvement in the U.S. economy was augmented by an increase in consumer confidence. The Reuters/University of Michigan preliminary index of consumer confidence increased in November 2009 after three straight months of decline. The index then rose again in December 2009, though not to the level expected by many analysts.

CG SECTOR

CEIR Index Report

The Conference Board’s Consumer Confidence Index increased in December 2009 for the second month in a row. Though long-term and overall consumer confidence increased, there was a decline in the Conference Board’s Present Situation Index, indicating lingering concerns about the stability of the economy in the short term. NSF NSF for the CG sector decreased at a (3.7%) CAGR from 2000 to 2009, underperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (15.8%) in 2009, following three straight annual decreases, including a (7.4%) drop in NSF in 2008 versus 2007. NSF performance for the CG sector in 2009 was on par with a (13.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the CG sector in 2009:  NSF for 90% of all CG exhibitions was down, 65% of these shows reported NSF declines of more than 10%, and 37% reported NSF fell 20+%.  CG events with more than 100,000 net square feet of space fared slightly better than average, with 56% posting declines in NSF of more than 10%, and 19% reporting NSF decreases of 20+%.  NSF for 82% of gift shows was down, and 47% of these shows posted 10+% losses.  NSF for 73% of jewelry shows was down, and 45% of these events reported declines of more than 10%.  NSF for 100% of apparel shows was down, 84% of these events showed 10+% losses, and 63% of these shows reported declines of more than 20%. Exhibitors Exhibitors for the CG sector declined at a (4.4%) CAGR from 2000 to 2009, well below the performance of the overall exhibition industry, which posted a CAGR decrease of (0.6%) across the 10-year period.

Some key insights into the performance of the CG sector in 2009:  Exhibitors for 81% of all CG exhibitions was down, 62% of these shows reported declines in Exhibitors of more than 10%, and 41% reported Exhibitors fell 20+%.  Exhibitors for 88% of gift shows was down, and 53% of these shows posted 10+% losses.  Exhibitors for 73% of jewelry shows was down, and 54% of these events reported declines of more than 10%.  Exhibitors for 78% of apparel shows was down, 72% of these events showed 10+% losses, and 67% of these shows reported declines of more than 20%. Attendees Attendees for the CG sector decreased at a (0.7%) CAGR from 2000 to 2009, underperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the CG sector declined (11.7%) versus 2008, marking the second straight annual decline, following a (3.3%) decrease in 2008 over 2007. The decline in Attendees for the CG sector in 2009 was larger than the (8.3%) loss posted by the overall exhibition industry. Some key insights into the performance of the CG sector in 2009:  Attendees for 73% of all CG exhibitions was down, 56% of these shows reported declines in Attendees of more than 10%, and 27% reported Attendees fell 20+%.  Attendees for 73% of gift shows was down, and 53% of these shows posted 10+% losses.  Attendees for 64% of jewelry shows was down, and 54% of these events reported declines of more than 10%.  Attendees for 78% of apparel shows was down, and 67% of these events showed 10+% losses.

Exhibitors for the sector declined (15.1%) in 2009 following three consecutive years of annual decreases, including an (8.4%) decline in 2008. Exhibitors for the CG sector underperformed the overall exhibition industry in 2009, which posted an (11.9%) decline. CG SECTOR

CEIR Index Report

Revenue Revenue for the CG sector decreased at a CAGR of (3.3%) from 2000 to 2009, well underperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the CG sector declined (21.2%) in 2009 following a (9%) decrease in 2008 versus 2007. Before that, Revenue had been up each year since a (7.2%) decline in 2003. Revenue for the CG sector well underperformed the overall exhibition industry in 2009, which posted a (15.8%) decline. Some key insights into the performance of the CG sector in 2009:  Revenue for 85% of all CG exhibitions was down, 68% of these shows reported declines in Revenue of more than 10%, and 53% reported Revenue fell 20+%.  Revenue for 82% of gift shows was down, and 55% of these shows posted 10+% losses.  Revenue for 75% of jewelry shows was down, and 50% of these events reported declines of more than 10%.  Revenue for 94% of apparel shows was down, 75% of these events showed 10+% losses, and 67% of these shows reported declines of more than 20%. Total 2000–2009: The Total for the CG sector decreased at a CAGR of (3%) from 2000 to 2009, far underperforming the overall exhibition industry, which remained relatively flat over the 10-year period. The Total for the CG sector was driven down by CAGR declines in all four metrics from 2000 to 2009, including a (4.4%) CAGR decrease in Exhibitors. 2008–2009: The Total for the CG sector declined (16%) in 2009 versus 2008, following a (7%) decrease in 2008 over 2007. Before that, the last decline for the sector was in 2003 of (2.5%). The Total for the CG sector well underperformed the Total for the overall exhibition industry, which declined (12.5%) in 2009. All metrics for the CG sector posted double-digit percentage decreases in 2009, led by a (21.2%) decline in Revenue.

2010 OUTLOOK  The economy in 2010 is likely to experience slow growth.  High unemployment remains a concern and will hamper the economic recovery.  Uncertainty regarding the government’s actions in 2010 may further slow the recovery in this sector. The performance of the Consumer Goods and Retail Trade sector will likely mirror that of the overall U.S. economy in 2010. During 2008 and 2009, many retail outlets ceased operations, but far fewer are expected to close in 2010. Additionally, the number of retail organizations posting profits should increase. However, while the retail industry should see continued improvement in 2010, the industry likely will not be as profitable as in previous years. The retail industry will continue to evolve as an increasing percentage of sales are made online. Currently, online sales account for only 4% of total retail sales, but greater access to high-speed Internet and an increasing comfort level among consumers in the security of online purchases will continue to expand this segment of the marketplace. The increased number of sales on the Internet will certainly help the overall industry, but early reports from the 2009 holiday season indicate that online sales were highly concentrated among longstanding, established retailers. Financially weak or relatively unknown outlets will not only face a slowgrowth environment in 2010 but also will have to compete for online market share against established retailers who have an advantage due to customer brand loyalty.

The performance of the Consumer Goods and Retail Trade sector will likely mirror that of the overall U.S. economy in 2010. One of the concerns for the retail industry in 2010 will be the reaction of customers to a slowly improving economic environment. During much of 2008 and 2009, retailers slashed prices to spur sales, and government subsidies for cars and other products also prompted sales. During 2009, many retailers felt moving inventory and maintaining liquidity were more important than maximizing prices. As a result, retailers that reduced prices to move goods may find that some consumers are reluctant to paying “full prices” going forward.

CG SECTOR

CEIR Index Report

However, an expansion of government subsidies on items such as appliances will likely help retailers in 2010. Still, there may be long-term negative effects on customer attitudes toward non-discounted items. Leading indicators for the retail industry reinforce the potential for a limited short-term recovery, but not for long-term growth. The National Retail Federation (NRF) has already reported that, after two years of decline, Q1 2010 retail container volume is expected to grow. In addition, it appears that construction of shopping centers has stabilized following a significant decrease in 2008 and 2009, according to the International Council of Shopping Centers (ICSC). In fact, shopping center construction may actually increase in 2010. Container volume is a precursor for future retail sales, and spending on shopping center construction increases when there is a strong likelihood of future demand. Underlying the slowly improving economy is an uncertainty regarding potential government actions in 2010. The NRF has already indicated considerable concerns about the health care bill’s impact on the retail industry. Other potential actions, such as large tax increases or a failure to curtail massive spending programs, largely fueled by considerable debt obligations, could stunt the economic recovery. Even highly successful retailers are likely to remain cautious regarding dramatic expansions or new product offerings in 2010.

… large tax increases or a failure to curtail massive spending programs, largely fueled by considerable debt obligations, could stunt the economic recovery. 2010 OUTLOOK FOR EXHIBITIONS  The performance for exhibitions in the Consumer Goods and Retail Trade sector will improve slightly in 2010 as compared to 2009.  Government action and the November federal elections will likely play a critical role in this sector in 2011. The “doom and gloom” outlook for the Consumer Goods and Retail Trade sector has been replaced by cautious shortterm optimism. Exhibitions in this sector should benefit from an improving retail industry.

“Our events business is rebounding nicely. Sales of exhibit space are up 20%, and attendance is up over 8%. I think these results confirm that the business model of face-to-face (especially “order writing” events), while in need of consistent enhancement and updating, is still largely intact.” – Britton Jones, President & CEO, Business Journals Inc. Unlike the last couple of years, where the number of exhibiting companies and net square feet declined, 2010 should see some stabilization in these areas and possibly some incremental growth. Exhibitions in this sector serve as important venues for the buying and selling of goods, so economic improvement should correspond with greater interest in attending shows, especially those that are well established and/or are held in locations that are easy and inexpensive to access. However, even if events see a small growth in attendance, organizers should not expect exhibitors to spend lavishly on sponsorships and hosted hospitality events. Exhibitors are expected to maintain an air of caution and are similar in many ways to their customers, who have become used to discounted prices. Exhibition attendees will likely not generate as much revenue per person as they did in previous years. Since many exhibitions are planned more than a year in advance, attention should be paid to the Federal Government’s actions and to the mid-term election in November 2010. As 2009 came to a close, a variety of important matters were being debated in the U.S. Congress, including a large health care overhaul, capand-trade legislation, a new stimulus package and a value-added tax (VAT). Each of these potential new laws could have a profound effect on the overall economy and on the retail industry specifically. For example, an increase in the tax burden of citizens may result in stalled or decreased consumer spending, particularly for nonessential or “luxury” items. In particular, a VAT would have an immediate negative impact on the retail sector. In sum, exhibition organizers in this sector should budget cautiously for 2010, but they can at least take solace that the worst of the economic troubles in the retail sector have passed.

The “doom and gloom” outlook for the Consumer Goods and Retail Trade sector has been replaced by cautious short-term optimism. CG SECTOR

CEIR Index Report

Sports, Travel, Entertainment, Art and Consumer Services (EN Sector) Economic Overview of 2009  Tourism spending began to rebound during the third quarter of 2009, although travel and tourism spending is still below its 2007 peak.  For the first time in 20 years, overall sales in the fitness equipment industry declined, as wholesale sporting goods sales decreased 3.2%. The Sports, Travel, Entertainment, Art and Consumer Services sector comprises a wide array of businesses that rely heavily on discretionary spending. As leisure time and personal incomes have grown, the industries represented in this sector have grown as well. Additionally, one segment of this sector, the travel and tourism industry, is one of the few industries credited with producing a positive balance of trade result for the U.S. economy in 2009. According to the Federal Bureau of Economic Analysis (BEA), tourism spending began to rebound in 2009. During Q3, spending on travel and tourism increased at a 6.4% annual rate after remaining relatively flat in Q2. Additionally, travel and tourism prices increased 6.7%. The travel sub-sector was aided by a 26.3% increase in passenger air spending in Q3 2009, and spending on accommodations increased at a 17% rate over the same period. This trend reflects increased occupancy rates; however, it was achieved by lowering the pricing for accommodations. Rising gasoline prices had a negative impact on automobile travel and tourism and will likely be a factor again in 2010. The sporting goods industry has been impacted by the economic downturn, but the industry is performing better than most other retail and consumer markets. For the first time in 20 years, overall sales in the fitness equipment industry declined, by a total of $500 million according to the Sporting Goods Manufacturers Association (SGMA). In its 2009 State of the Industry report, the SGMA further noted that there was a 3.2% decrease in wholesale sporting goods sales to $66.3 billion.

EN SECTOR SUB-SECTORS amusement 

art 

beauty & personal care 

boats 

fishing 

funeral industry 

hotels & resorts 

real estate 

recreational vehicles 

religious 

rental & leasing 

sporting goods & recreation 

toys & hobbies 

travel industry

According to the November 2009 U.S. Census Bureau’s Monthly Trade and Food Services report, total sporting goods, hobby, book and music sales decreased 1.4% compared to the same period in 2008. As a comparison, total retail and food service sales declined 7.4% during the same period.

… the industry is performing better than most other retail and consumer markets. EN SECTOR

CEIR Index Report

The following two graphs compare the EN sector performance to the overall exhibition industry performance for the period 2000-2009.

EN SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the EN Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. EN SECTOR â&#x20AC;&#x201C; Sports, Travel, Entertainment, Art and Consumer Services Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

109.0

9.0

112.3

3.0

109.0

-3.0

109.2

0.2

115.9

6.2

118.5

2.3

120.8

2.0 119.8

-0.8

101.3

-15.5

0.1%

Exhibitors

100.0

104.5

4.5

102.6

-1.9

104.4

1.8

102.7

-1.7

106.1

3.4

104.2

-1.8

107.6

3.3 104.4

-3.0

91.2

12.6

-1.0%

Attendees

100.0

118.3

18.3

116.8

-1.3

121.4

4.0

146.7

20.8

147.8

0.7

147.2

-0.4

162.7

10.5 155.4

-4.5

147.6

-5.0

4.4%

Revenue

100.0

116.6

16.6

125.9

8.0

140.2

11.4

142.6

1.7

159.5

11.9

177.8

11.5

189.0

6.3 189.0

0.4

149.1

-21.4

4.5%

Total

100.0

112.1

12.1

114.4

2.1

118.8

3.8

125.3

5.5

132.3

5.6

136.1

2.9

143.7

5.5 140.8

-2.0

121.6

-13.7

2.2%

In 2009, employment in the EN sector outperformed employment in the overall economy, according to the U.S. Department of Laborâ&#x20AC;&#x2122;s Bureau of Labor Statistics (BLS). In the leisure and hospitality industry, employment decreased 1.6% in 2009. By comparison, non-farm employment fell 3.1% for the year.

While this sector outperformed the overall economy from an employment perspective, it continues to be impacted by the downturn in the economy, as within each segment of this sector, except museums, historical sites, zoo and park employment, the number of jobs decreased in 2009 as compared to 2008 levels.

Also in 2009, employment in the leisure and hospitality, performing arts and spectator sports industries fell 2.3%; museum, historical sites, zoo and park employment increased 0.3%; amusements, gambling and recreation employment decreased 3.3%; hotel accommodation employment declined 5.4%; and employment in sporting goods fell 6.1%.

EN SECTOR

CEIR Index Report

NSF

Exhibitors

NSF for the EN sector remained relatively flat on a CAGR basis from 2000 to 2009, similar to the performance of NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period.

Exhibitors for the EN sector declined at a (1%) CAGR from 2000 to 2009, on par with the performance of the overall exhibition industry, which posted a CAGR decrease of (0.6%) across the 10-year period.

NSF for the sector declined (15.5%) in 2009 following a (0.8%) decrease in 2008 versus 2007. Prior to that, NSF for the EN sector had posted gains since a (3%) decline in 2003. NSF for the EN sector in 2009 slightly underperformed the (13.9%) decline posted by the overall exhibition industry.

Exhibitors for the sector declined (12.6%) in 2009, following a (3%) decrease in 2008. Performance for Exhibitors for the EN sector was inconsistent across the 10-year period. Exhibitors performance for the EN sector in 2009 was on par with an (11.9%) decline for the overall exhibition industry.

Some key insights into the performance of the EN sector in 2009:

 NSF for 86% of all EN exhibitions was down, and 63% of these shows reported NSF declines of more than 10%.

 Exhibitors for 77% of all EN exhibitions was down, and 49% of these shows reported Exhibitors declined more than 10%.

 NSF for 33% of toys and hobbies shows was down 10+%.

 Exhibitors for 90% of EN events with 100,000+ net square feet of space was down, and 45% of these shows reported declines of more than 10%.

 NSF for 95% of EN events with 100,000+ net square feet of space was down, and 60% of these shows reported declines of more than 10%.  NSF for 100% of sporting goods events was down, 75% of these events showed 10+% declines, and 42% of these shows reported declines of more than 20%.  NSF for 100% of recreational vehicle events was down, 83% of these events showed 10+% declines, and 33% of these shows reported declines of more than 20%.  NSF was flat or up for 50% of health and beauty shows.

 Exhibitors for 33% of toys and hobbies shows was down 10+%.  Exhibitors for 75% of recreational vehicle events was down 10+%.  Exhibitors for 58% of sporting goods events was down more than 10%, and 33% of these events showed 20+% declines.  Exhibitors was flat or up for 50% of health and beauty shows.  Exhibitors was down for 100% of entertainment shows.

 NSF was down for 100% of entertainment shows.

EN SECTOR

CEIR Index Report

Attendees

Revenue

Attendees for the EN sector increased at a 4.4% CAGR from 2000 to 2009, well outperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period.

Revenue for the EN sector increased at a CAGR of 4.5% from 2000 to 2009, well outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period.

In 2009, Attendees for the EN sector declined (5%) versus 2008, marking the second straight annual decline, following a (4.5%) decrease in 2008 over 2007. Attendees for the EN sector in 2009 outperformed the (8.3%) loss posted by the overall exhibition industry.

Revenue for the EN sector declined (21.4%) in 2009, following gains for each year since the start of the Index in 2000. In 2009, Revenue for the EN sector well underperformed the overall exhibition industry, which posted a (15.8%) decline.

Some key insights into the performance of the EN sector in 2009:

 Attendees for 55% of all EN exhibitions was down, and 39% of these shows reported Attendees declines of more than 10%.

 Revenue for 93% of all EN exhibitions was down, and 67% of these shows reported Revenue declines of more than 10%.

 Attendees was up for 33% of EN events with 100,000+ net square feet of space. However, 39% of these shows reported 10+% losses.

 Revenue for 100% of sporting goods events was down.

 Attendees for 67% of sporting goods events was down more than 10%, and 42% of these shows reported declines in Attendees of 20+%.  Attendees was up for 67% of toys and hobbies shows.  Attendees was flat or up for 40% of recreational vehicle events.  Attendees was flat or up for 75% of health and beauty shows.  Attendees was up for 50% of entertainment shows.

 Revenue for 100% of entertainment shows was down. Total 2000–2009: The Total for the EN sector increased at a CAGR of 2.2% from 2000 to 2009, far outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. The EN sector was one of the best performing sectors in the Index over the period. The Total for the EN sector was helped by 4.5% and 4.4% CAGR increases in Revenue and Attendees, respectively, from 2000 to 2009. Only Exhibitors posted a declining CAGR, of (1%), across the period. 2008–2009: The Total for the EN sector declined (13.7%) in 2009 versus 2008, following a (2%) decrease in 2008 over 2007. Prior to that, the sector had gained each year since the Index started in 2000. The Total for the EN sector was on par with the performance of the overall exhibition industry, which declined (12.5%) in 2009. Three of the four industry metrics for the EN sector posted double-digit percentage decreases in 2009, led by a (21.4%) decline in Revenue. Attendees was the only metric not to post a double-digit percentage decline, and it decreased (5%) for the year.

EN SECTOR

CEIR Index Report

2010 OUTLOOK  Overall growth in this sector is expected to be 3.1% in 2010.  Alternatives to business travel, such as Webbased, face-to-face video conferencing, have been implemented during the Great Recession, reducing the amount of business travel required. This trend may have a negative long-term impact on business travel. The EN sector’s revenue and employment levels have been impacted by the decline in discretionary spending across both the consumer and business markets. Additionally, the decline in exhibition travel and attendance has also negatively affected this sector. Much like Professional Business Services, this sector is strongly correlated with the overall U.S. economy but tends to be more volatile. Gross Domestic Product (GDP) is forecast to grow 2.4% during 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, rising from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. However, the unemployment rate is expected to rise in 2010 to around 10% before declining in 2011. It is expected that the EN sector will grow 3.1% in 2010. This increase is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures, and sector data. These findings are consistent with those from other forecasts related to this sector. However, because of the possibility of a “doubledip” recession and other such factors, a rebound in arts and entertainment spending is expected to be uneven and modest at best.

The travel industry has gone through a deep analysis of business travel expenses during the economic downturn. Alternatives to business travel have been developing for years, such as Web-based, face-to-face video conferencing and collaboration software. These technologies have been adopted at a quicker pace during the downturn, and some companies will be reluctant to increase spending on business travel, even when the economy rebounds. According to Fitch Ratings, however, business travel spending has begun to increase in recent months, and it is expected that business travel spending will rise about 1.0% during 2010. Airline fares are expected to rise 4.0% in the U.S. in 2010, driven by limited capacity as the airlines continue to reduce the number of flights. However, hotel capacities are not as easy to reduce and, therefore, hotel rates are expected to decrease 3.5% for the year. The net result is an expected increase in business travel costs of 1% to 2%. Further, hotel occupancy rates are expected to rise from a low of 55.2% to 56% or 57% in 2010, certainly not a big jump, but better than a 5% decline in 2009 versus 2008. Fitch Ratings estimates revenue growth of 5% for the personal care products sub-sector in 2010, after having declined 3.4% for the first three quarters of 2009. Further, Fitch expects low but positive growth in the toy business during 2010, despite its discretionary nature.

It is expected that the EN sector will grow 3.1% in 2010.

EN SECTOR

CEIR Index Report

2010 OUTLOOK FOR EXHIBITIONS  The Great Recession had a significant, negative impact on the performance of exhibitions in the EN sector. Historically, however, the sector has been resilient.  As the leading edge of the 18-year baby boomer generation begins to retire, it is certain to drive growth in this sector. According to the CEIR Exhibition Industry Census, there are 920 business-to-business exhibitions in the Sports, Travel, Entertainment, Art and Consumer Services sector, accounting for 9.2% of the event market. By reviewing historical information provided in the CEIR Index, an estimation of the Great Recession’s impact on this sector can be forecast. The most recent recession, from March 2001 to November 2001, had little impact on the EN sector. In fact, three key metrics increased in 2002 as compared to 2001, including Total by 2.1%, NSF by 3.0%, and Revenue by 8.0%. Number of Exhibitors and Attendance declined 1.9% and 1.3% respectively. However, the recession of 2001 was much shallower and shorter than the Great Recession, and exhibitions in this sector have been more severely impacted in the recent downturn, as seen by the decreases for this sector in 2009. It is likely that declines in exhibitions for this sector will continue into 2010.

The Total for this sector declined 13.7% in 2009, while NSF, Exhibitors, Attendance and Revenue were down 15.5%, 12.6%, 5.0% and 21.4% respectively. It might take some time for exhibitions in this sector to rebound to their pre-Great Recession highs, as this downturn brought exhibition results for this sector back to 2000 levels. As a result, exhibition performance for this sector has been relatively flat on a CAGR basis since 2000. The government has done little to help businesses in this sector. Though the American Recovery and Reconciliation Act of 2009 provided $797 billion in stimulus funding and tax cuts to a variety of industries, only a small percentage was directed to the Sports, Travel, Entertainment, Art and Consumer Services sector. Most of that support was directed at the National Park Service, which will receive $750 million from the Act, and the National Wildlife Refuge, which is expected to receive $280 million in supplemental investment monies. The National Endowment for the Arts received $50 million to support artists. The long term outlook for exhibitions in this sector is bright. The leading edge of the 18-year baby boomer generation is reaching retirement age and those who can afford to retire likely will do so. By nature and history, they are sports and hobby enthusiasts and, unlike prior generation retirees, this generation will likely continue to spend on the things that give them pleasure, just as they did as they aged.

EN SECTOR

CEIR Index Report

Food (FD Sector) Economic Overview of 2009  Grocery sales modestly improved in 2009 over 2008 levels as consumers began purchasing more basic items toward the end of the year.  The restaurant industry continued to suffer in 2009 as the Great Recession thwarted many consumers from eating out. Overall, the Food sector was turbulent in 2009 – for both restaurants and grocery stores. Entry into the grocery business by low-cost providers, such as Walmart and Target, has continued to cause tremendous disruption in this market, similar to the effect fast-food chains had on the restaurant business. According to the U.S. Census Bureau, in November 2009, grocery store sales were $44.6 billion, a 1.1% increase over November 2008. Food services and drinking sales were $38.0 billion in November 2009, representing a 0.2% year-over-year decrease. Total retail and food services sales were $352.1 billion in November 2009, a 1.9% increase from the same month in 2008. The Food Institute reported that supermarket and restaurant chains saw their patrons buy more basic products at the end of 2009. According to the Institute’s Price Index, November sales at grocery stores increased 1.0%, while eating and drinking establishments saw their sales increase 0.5%. These increases reversed the declines seen in December 2008, when monthly sales were off 4.7% for groceries and 6.6% for eating and drinking establishments. The National Restaurant Association (NRA) reported that the restaurant industry weakened toward the end of 2009. The NRA’s Restaurant Performance Index (RPI), a monthly composite that tracks the outlook of the U.S. restaurant industry, declined in November, reflecting the third decline in four months. Additionally, the RPI stood at 97.8% in November, its 25th consecutive month below 100, which indicates contraction for the Index. The NRA’s Current Situation Index (CSI), which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.0 in November, down 0.5% from October and tied for its second lowest level on record. In addition, November marked the CSI’s 27th consecutive month below, indicating contraction for the Index.

FD SECTOR SUB-SECTORS food & beverage 

food processing & distribution 

restaurant & food service Restaurant operators reported declining same-store sales for the 18th consecutive month in November 2009. Only 24% of restaurant operators reported a same-store sales gain between November 2008 and November 2009, a slight increase from the 22% that reported sales gains in October. Sixty-five percent of operators reported a samestore decline in November, an increase from the 61% who reported losses in October. Customer traffic was negative for the 27th consecutive month in November 2009. The NRA’s Expectations Index (EI), which measures restaurant operators’ six-month outlook across four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 99.6 in November – unchanged from October. This marked the 24th time in 25 months that the EI was below 100. According to the U.S. Department of Labor’s Bureau of Labor Statistics (BLS), from December 2008 to December 2009, the Food Manufacturing sector declined 0.7% in employment to 1.47 million workers. Similar declines were seen in food service and drinking establishments, in which the number of workers decreased from 9.56 million in December 2008 to 9.51 million in December 2009. Food and beverage stores repeated this pattern over the same period, declining from 2.84 million workers to 2.80 million workers. In December 2009, food services employment continued to trend downward, losing 15,200 jobs, and employment in this sector has decreased by 54,000 jobs since 2008. The CPI for food fell 0.7% in the 12 months ending November 2009. In comparison, the CPI for food rose 5.9% in 2008. The Food At Home Index fell 2.9% over the same period, with five of six grocery store food groups declining. This decline was the largest since 1949. However, the Index for Food Away From Home rose 2.1% during the 12-month time frame.

FD SECTOR

CEIR Index Report

The following two graphs compare the FD sector performance to the overall exhibition industry performance for the period 2000-2009.

FD SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the FD Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. FD SECTOR – Food Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

NSF

100.0

98.6

-1.4

97.3

-1.3

99.5

2.3

108.1

8.7

99.8

-7.7

109.3

9.4

109.0

-0.2

106.9

-2.0

89.1

-16.6 -1.3%

Exhibitors

100.0

98.7

-1.3

94.6

-4.1

97.5

3.1

109.7

12.5

93.6

-14.7 113.7

21.5

116.3

2.3

112.3

-3.4

97.4

-13.3 -0.3%

Attendees

100.0

85.6

-14.4

82.0

-4.2

88.1

7.5

107.2

21.7

92.3

-13.9

92.1

-0.2

94.6

2.8

90.6

-4.3

82.9

-8.5

Revenue

100.0

98.7

-1.3

89.7

-9.1

93.2

4.0

99.6

6.9

92.8

-6.9

91.5

-1.4

88.0

-3.9

85.9

-2.4

66.2

-22.9 -4.5%

Total

100.0

95.4

-4.6

90.9

-4.7

94.6

4.1

106.2

12.2

94.6

-10.9 101.6

7.4

101.8

0.2

98.7

-3.0

83.6

-15.2 -2.0%

NSF NSF for the FD sector decreased (1.3%) on a CAGR basis from 2000 to 2009, well underperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the FD sector declined (16.6%) in 2009, marking the third straight annual decrease, including a (2%) loss in 2008 versus 2007. NSF for the FD sector in 2009 underperformed the (13.9%) decline posted by the overall exhibition industry.

CAGR

-2.1%

Some key insights into the performance of the FD sector in 2009:  NSF for 81% of all FD exhibitions was down, and 50% of these shows reported NSF declines of more than 10%.  NSF for 88% of FD events with 100,000+ net square feet of space was down, and 38% of these shows reported declines of more than 10%.  NSF for only 20% of FD shows in Q4 declined more than 5%.

FD SECTOR

CEIR Index Report

Exhibitors Exhibitors for the FD sector declined at a (0.3%) CAGR from 2000 to 2009, on par with the performance of the overall exhibition industry, which posted a CAGR decrease of (0.6%) across the 10-year period. Exhibitors for the sector declined (13.3%) in 2009 following a (3.4%) decrease in 2008 versus 2007. Performance for Exhibitors for the FD sector has been inconsistent across the 10-year period. Exhibitors performance for the FD sector in 2009 was on par with an (11.9%) decline for the overall exhibition industry. Some key insights into the performance of the FD sector in 2009:  Exhibitors for 75% of all FD exhibitions was down, and 38% of these shows reported Exhibitors declined more than 10%.  Exhibitors for 75% of FD events with 100,000+ net square feet of space was down, and 38% of these shows reported declines of more than 10%.  Exhibitors was flat or up for 60% of Q4 shows. Attendees Attendees for the FD sector decreased at a (2.1%) CAGR from 2000 to 2009, well underperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the FD sector declined (8.5%) versus 2008, marking the second straight annual decline, following a (4.3%) decrease in 2008 over 2007. Attendees for the FD sector in 2009 matched the performance of the overall exhibition industry, which posted an (8.3%) decline. Some key insights into the performance of the FD sector in 2009:

“Events in the food sector during the first half of 2010 are basically on par with 2009 levels in regards to exhibitor numbers and event size, but the number of attendees has increased significantly, as they have been turning out in force. As in 2009, companies are sending fewer buyers, as compared to 2007 and 2008, but the number of buying companies has grown. On-site and post-show sign-ups for the next event reflect the increase in, and also high quality of, the attendance. This bodes well for growth in exhibit space and number of exhibitors for next years’ events.” – Nancy Hasselback, President & CEO, Diversified Business Communications Revenue Revenue for the FD sector decreased at a CAGR of (4.5%) from 2000 to 2009, well underperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the FD sector declined (22.9%) in 2009, marking the fifth straight annual loss. Since the start of the Index in 2000, the FD sector has posted positive gains in Revenue in only two years – 2003 and 2004. In 2009, Revenue for the FD sector well underperformed the overall exhibition industry, which posted a (15.8%) decline. Some key insights into the performance of the FD sector in 2009:  Revenue for 100% of all FD exhibitions was flat or down, and 67% of these shows reported Revenue declines of more than 10%.  Revenue for 100% of events with greater than 100,000 net square feet of space was down, and 50% of these shows posted declines greater than 10%.

 Attendees for 69% of all FD exhibitions was flat or down, and 31% of these shows reported Attendees declines of more than 10%.  Attendees for 75% of FD events with 100,000+ net square feet of space was down, and 25% of these shows reported 10+% losses.  However, 60% of all Q4 shows reported flat results or growth in Attendees for the FD sector.

FD SECTOR

CEIR Index Report

Total 2000–2009: The Total for the FD sector decreased at a CAGR of (2%) from 2000 to 2009, well underperforming the overall exhibition industry, which remained relatively flat over the 10-year period. The FD sector was the worst performing sector in the Index since it started in 2000. From 2000 to 2009, all four industry metrics declined on a CAGR basis for the FD sector, led by a (4.5%) CAGR decrease in Revenue. 2008–2009: The Total for the FD sector declined (15.3%) in 2009 versus 2008, following a (3%) decrease in 2008 over 2007. Prior to that, the sector had gained in 2006 and 2007, following a (10.9%) decline in 2005 versus 2004. The Total for the FD sector underperformed the overall exhibition industry, which declined (12.5%) in 2009. Three of the four industry metrics for the FD sector posted double-digit percentage decreases in 2009, led by a (22.9%) decline in Revenue. Attendees was the only metric not to post a double-digit percentage decline, and it decreased (8.5%) for the year. 2010 OUTLOOK  The Food sector is forecast to grow approximately 2.3% in 2010.  The “farm-to-fork” movement is a hot trend in the sector, with retail sales of organic food increasing 580% from 1997 to 2008. The Food sector has seen a consumer shift during the Great Recession, with many families viewing eating out as a luxury or trading down to lower-cost restaurants. Similarly, grocers have had to compete more vigorously on price as consumers have become more price conscience in the weak economy. Gross Domestic Product (GDP) is forecast to grow approximately 2.4% in 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, rising from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. However, unemployment is expected to continue to increase, albeit at a slower pace than in 2009. As such, unemployment is expected to reach 10% in 2010 before decreasing again in 2011.

It is expected that the Food sector will grow approximately 2.3% in 2010. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, and government expenditures, and sector data. These findings are consistent with those from other forecasts related to this sector. According to the NRA, restaurant operators are more optimistic about sales in 2010. Approximately 31% of restaurant operators expect to have higher sales in the first six months of 2010 compared to the same period in 2009. Although restaurant operators are expecting better samestore sales, expectations regarding staffing and capital expenditures remain stagnant. One segment of the restaurant industry that continues to gain traction is menu items relating to sustainability, local sourcing and nutrition. An NRA survey revealed that the “farm-to-fork” movement is one of the hottest trends in the culinary industry. Retail sales of organic food grew from $3.6 billion in 1997 to $21.1 billion in 2008, according to the U.S. Department of Agriculture (USDA). Retailers, including grocery stores, that leverage sustainable food practices expect to see continued growth. Whole Foods Markets, for example, expects sales for 2010 to increase 5% to 8%, with same-store sales rising 1% to 4%. Liquor stores sales are expected to increase 0.7% in 2010, whereas alcohol sales on-premise is expected to decline 2.5%, according to Restaurants & Institutions, a leading business-to-business media outlet for the food service industry. A report by the International Wine and Spirit Record (IWSR) forecasts the global spirits market will grow at a CAGR of 0.4% through 2013. The record also forecasts the global wine market will grow at a CAGR of 0.6% through the same period. The report notes that the U.S. will be the fastest growing white-spirits market, with vodka remaining its most trendy beverage.

One segment of the restaurant industry that continues to gain traction is menu items relating to sustainability, local sourcing and nutrition.

FD SECTOR

CEIR Index Report

2010 OUTLOOK FOR EXHIBITIONS  The Food sector will rebound economically in 2010 and see modest growth for the year.  The Great Recession has helped strengthen the food marketplace, as weaker businesses have closed and new markets have been created, such as healthy take-home food and culinary studios.  Opportunities in the Food sector for exhibitions exist, driven by healthy and convenient eating and new culinary experiences for consumers. The Food sector will show signs of stabilization and modest growth in 2010 as consumers return to bars and restaurants. While many people will continue to eat at home, some will be lured back into the marketplace by discounts, new products and intensive advertising. Advertising costs have declined as the sector has discovered social media and interactive advertising – especially to reach younger audiences. Matching new consumers with new products will also account for some growth (e.g., America’s new passion for wine over beer and some spirits). Organic foods will sustain momentum with environmentally minded consumers, as well as from mounting social and political pressures to reduce obesity. Finally, selected food markets will continue to expand. For example, Kraft’s takeover of Cadbury was driven partly by the desire to introduce chocolate and gum into markets like India. Kraft continued to prosper through the recession by rising sales of luxury candies and inexpensive, convenient meals such as hot dogs and frozen pizzas.

Organic foods will sustain momentum with environmentally minded consumers …

… the exhibition industry might do well to focus on markets emphasizing health, convenience and new culinary experiences for the consumer. Cooking and foodie tourism shows remain popular with consumers, fueling the growth of “culinary studios,” where people can use a fully stocked and prepared kitchen to create a healthy meal. Despite modest growth of the Food sector, there is still some softness related to fundamental decreases in expendable income and employment. Many overextended fast food chains with cash flow problems will not survive the next few years. Chains such as Starbucks will continue to close underperforming stores to shore up balance sheets. Consumer tastes are ever changing, and the trend toward healthy foods and international cuisines and fusions will only increase. Given the economic outlook for 2010, the exhibition industry might do well to focus on markets emphasizing health, convenience and new culinary experiences for the consumer. “After two challenging years, the outlook for the restaurant industry is improving in 2010, as record-high sales of $580 billion are expected. The industry continues to be an essential driver of overall economic recovery and growth. The National Restaurant Association’s latest Restaurant Performance Index is at its highest level in more than two years, driven by operators’ optimism over future sales, hiring, and capital spending plans. Now is the perfect time to explore trade shows, such as the 2010 National Restaurant Association Restaurant, HotelMotel Show in Chicago in May. Events such as this one provide the opportunity to leverage improving economic conditions and drive business in 2010 and beyond.” – Mary Pat Heftman, Executive Vice President, Conventions, National Restaurant Association (NRA)

FD SECTOR

CEIR Index Report

Government, Public and Nonprofit Services (GV Sector) ECONOMIC OVERVIEW OF 2009  As a result of decreases in corporate profits and personal income, government revenues fell 17% in 2009, the largest decrease since 1952.  While most sectors saw job losses in 2009, government employment increased 1.7% for the year. A portion of this increase, especially for education and hospitals, is due to the American Recovery and Reinvestment Act (ARRA) of 2009.  While the number of nonprofits has increased over the past year, revenue to nonprofits has fallen dramatically, with fewer and smaller donations and dues. During 2009, spending in the Government, Public and Nonprofit Services sector increased significantly at the federal level, even though government revenue decreased. The Great Recession drove an increase in demand for government and nonprofit services, and it also led to reduced revenue streams. Overall, federal government revenue fell 17% in 2009, the largest drop since 1952. Government revenue was affected by a decline in corporate profits, which fell 6.7% in Q3 2009 compared to Q3 2008. Additionally, personal income fell, including a 1.0% dip in October 2009. Meanwhile, federal government outlays increased 24% to $3.7 trillion in 2009. Employment in government at all levels rose 1.7%, from 22.5 million in 2008 to 23 million employees in 2009. Federal government employment increased 3.3%, from 2.76 million in 2008 to 2.84 million in 2009. The last similar increase was nearly a decade ago in 2000. The largest single federal employer, the U.S. Department of Defense, increased employment 7.2% in 2009 to 531,900 employees. Employment in state and local governments also rose at rates of 3.2% and 8.0% respectively. Most of this increase was in the education sector, which saw an 8.6% rise at the state level and a 2.5% increase at the local level. The increase in education employment and increases in staffing at government-run hospitals offset work force reductions in other areas of state and local government. Much of the increased employment in education and hospitals can be attributed to funds from the American Recovery and Reinvestment Act (ARRA) of 2009 that were intended to stimulate the economy.

GV SECTOR SUB-SECTORS associations 

education 

fire & fire protection 

government 

libraries 

military 

police

The federal government took a number of extraordinary measures in 2009 intended to combat the effects of financial crisis and economic recession, including ARRA and continued use of the Troubled Assets Relief Program (TARP). The ARRA is a $787 billion package enacted in February 2009, which was allocated as follows:  $288 billion as tax credits for individuals and companies  $144 billion for state and local fiscal relief  $111 billion for infrastructure and science  $83 billion in protecting the vulnerable*  $59 billion for health care  $53 billion for education and training  $43 billion for energy  $8 billion for other projects.

GV SECTOR

CEIR Index Report

The following two graphs compare the GV sector performance to the overall exhibition industry performance for the period 2000-2009.

GV SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the GV Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. GV SECTOR â&#x20AC;&#x201C; Government, Public and Nonprofit Services Metric

2000

2001

2002

2003

2004

2005

NSF

100.0

99.0

-1.0

100.8

1.8

109.1

8.2

114.4

4.9

102.6

-10.3 117.4

Exhibitors

100.0

99.1

-0.9

100.8

1.7

97.8

-3.0

109.6

12.1

102.2

-6.8

105.5

Attendees

100.0

99.3

-0.7

97.2

-2.1

91.0

-6.3

104.9

15.2

105.1

0.2

92.0

Revenue

100.0

105.9

5.9

98.7

-6.8

94.5

-4.2

106.2

12.3

98.7

-7.0

Total

100.0

100.8

0.8

99.4

-1.5

98.1

-1.3

108.8

10.8

102.2

-6.1

The ARRA was intended to stimulate the economy and also provide funds to invest in projects offering long-term economic advantages for the country, including moving toward energy independence and conservation, improving health care delivery and efficiency, and promoting a more advanced technological infrastructure. By the end of 2009, approximately $266 billion of the allocated $787 billion had been used. Similarly, by the end of 2009, approximately $298 billion had been spent on TARP programs to stabilize the financial systems.

2006

2008

2009

CAGR

14.4 133.6

13.8

135.6

1.5 128.0

-5.5

2.8%

3.3 121.4

15.0

118.9

-2.0 122.4

2.9

2.3%

95.8

4.2

83.2

88.1

5.9

-1.4%

97.5

-1.3 114.3

17.3

112.5

-1.6 106.7

-5.1

0.7%

103.2

1.0 116.1

12.6

111.6

-3.9 111.2

-0.4

1.2%

-12.5

2007

-13.2

Many economists and politicians are increasingly concerned about the dangers of the growing national debt. The Congressional Budget Office (CBO) projected the deficit to be $1.6 trillion (11.2% of the GDP) for FY 2009. This brings the national debt to approximately $11 trillion and makes it an increasing percentage of government expenditures. Some economists and politicians fear that many government programs and services will not be sustainable based on projected revenue streams and that the national debt could adversely impact economic growth.

GV SECTOR

CEIR Index Report

The number of nonprofit organizations rose to 1.9 million in 2009, from 1.8 million in 2008. However, overall revenue to nonprofits has fallen dramatically with fewer and smaller donations and dues. Nonprofit institutions had combined revenue of approximately $1 trillion in 2009. Large organizations (over $10 million in revenue) accounted for just 6% of organizations in the industry yet accounted for 80% of annual revenue. The largest category of nonprofits in terms of number of organizations is human services organizations (38%); the largest in terms of revenue is health organizations (more than 50%). Nonprofits are particularly dependent on giving from corporations and individuals. In 2009, giving dropped substantially, with 60 of the leading foundations averaging a 28% decrease in assets. Many nonprofits are dependent on membership dues, but employment at membership associations was down 1.2%, from 2.97 million in 2008 to 2.93 million employees in 2009.

In 2009, giving dropped substantially, with 60 of the leading foundations averaging a 28% decrease in assets. NSF NSF for the GV sector increased at a 2.8% CAGR from 2000 to 2009, outperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (5.5%) in 2009 following three straight years of gains from 2006 to 2008. NSF for the GV sector in 2009 well outperformed NSF for the overall exhibition industry, which declined (13.9%). Some key insights into the performance of the GV sector in 2009:  NSF for 53% of all GV exhibitions was flat or grew. However, 27% of these shows reported NSF declined more than 10%.

Exhibitors Exhibitors for the GV sector increased at a 2.3% CAGR from 2000 to 2009 as compared to a (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector increased 2.3% in 2009, following a 2.9% gain in 2008 over 2007. Exhibitors for the GV sector in 2009 well outperformed Exhibitors for the overall exhibition industry, which posted an (11.9%) decline. Some key insights into the performance of the GV sector in 2009:  Exhibitors for 40% of all GV exhibitions was flat or grew. However, 20% of these shows reported Exhibitors declined more than 10%.  Exhibitors for 50% of defense shows was flat or grew.  Exhibitors for 83% of GV shows with more than 100,000 net square feet of space was flat or grew. Attendees Attendees for the GV sector decreased at a (1.4%) CAGR from 2000 to 2009, underperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the GV sector increased 5.9% versus 2008, following a (13.8%) decrease in 2008 over 2007. The gain in Attendees for the GV sector in 2009 was significantly better than the (8.3%) loss in Attendees posted by the overall exhibition industry. Some key insights into the performance of the GV sector in 2009:  Attendees for 62% of all GV exhibitions was flat or grew. However, 31% of these shows reported Attendees declined more than 10%.

 NSF for 75% of defense shows was flat or grew.

 Attendees for 75% of defense shows was flat or grew.

 NSF for 83% of GV shows with more than 100,000 net square feet of space was flat or grew.

 Attendees for 67% of GV shows with more than 100,000 net square feet of space was flat or grew.

GV SECTOR

CEIR Index Report

Revenue Revenue for the GV sector increased at a CAGR of 0.7% from 2000 to 2009, slightly outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the GV sector declined (5.1%) in 2009, following a (1.6%) decrease in 2008 versus 2007. Revenue performance for the GV sector in 2009 was better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the GV sector in 2009:  Revenue for 33% of all GV exhibitions was flat or grew. However, 17% of these shows reported Revenue declined more than 10%.  Revenue for 50% of defense shows was flat or grew. Total 2000–2009: The Total for the GV sector increased at a CAGR of 1.2% from 2000 to 2009, outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. Growth in Total for the GV sector was driven by CAGR gains in NSF, Exhibitors and Revenue, while Attendees declined from 2000 to 2009. 2008–2009: The Total for the GV sector declined (0.4%) in 2009 versus 2008, following a (3.9%) decrease in 2008 over 2007. Before that, the last decline for the sector was in 2005 of (6.1%). Total performance for the GV sector in 2009 was significantly better than the (12.5%) decline posted by the overall exhibition industry. Two of the four industry metrics posted gains in 2009 for the GV sector, led by a 5.9% gain in Attendees.

Although the long-term future of defense spending is uncertain, it will continue to grow significantly in the short-term.

2010 OUTLOOK  ARRA spending is expected to double in 2010, as compared to 2009, with a focus on infrastructure, energy, technology, and health care.  Uncertainty in regard to health care legislation during 2010 complicates forecasts for government performance.  The nonprofit sector can anticipate a continued drop in revenues as individuals, and particularly corporations, decrease donations. Various estimates place the decrease in revenue in excess of 10%. Overall government spending on goods and services (excluding expenditures for employee salaries) will grow 3% in 2010 and range from 3% to 4% between 2010 and 2014. The federal government will continue to have record high outlays. Non-defense discretionary funding will increase 17% in 2010, with the bulk of ARRA spending to occur in 2010. Approximately 80% of the $115,266 billion in ARRA spending during 2009 was on Medicaid, unemployment insurance, a one-time payment to Social Security beneficiaries, financial assistance to states, and assistance to college students in the form of Pell grants. By contrast, ARRA spending in 2010 will nearly double and focus more heavily on infrastructure, energy, technology, and health care. Although the long-term future of defense spending is uncertain, it will continue to grow significantly in the short-term. During 2010, defense spending is expected to increase 6% and procurement of weapon systems and military hardware is forecast to increase 9%. Pending legislation to address health care and climate change during 2010 may have significant impacts on the economy. Health care costs are increasingly putting a strain on federal and state governments, and the percentage of the economy devoted to health care is expected to increase from current levels of 16% of the economy to 25% by 2025. The federal government is expected to be the largest spender on health care by 2018. Uncertainty in regards to health care legislation during 2010 complicates forecasts for government performance. Furthermore, the federal government is increasingly adopting an environmental mission that expands beyond the Environmental Protection Agency (EPA). Legislation to address climate change, regulation by federal agencies, and funding through the ARRA and other sources to promote environment-friendly technology are all expected to be part of government efforts in 2010.

GV SECTOR

CEIR Index Report

A major challenge facing the federal government during 2010 will be hiring and training skilled employees. By December 2010, approximately 60% of federal employees in management positions will be eligible for retirement. This will require the federal government to more aggressively develop recruitment campaigns and initiatives to fill management positions in a time of enormous demand for federal government services.

By December 2010, approximately 60% of federal employees in management positions will be eligible for retirement. The nonprofit sector can anticipate a continued drop in revenues as individuals, and particularly corporations, decrease donations. Various estimates place the decrease in revenue to exceeding 10%. For example, the Foundation Center predicts an 8% to 13% decrease in giving during 2010. In most comparable economic downturns, a reduction in giving lasts approximately three years. Similarly, the downturn in giving to nonprofits for this recession is expected to extend across the 2008-2010 time period. According to economic modeling by First Research, annual giving is expected to grow again between 2011 and 2014, with revenue increasing 3% to 6% annually. The industry is expected to face increased scrutiny over efficient use of donations as givers are typically more sensitive to achieving maximum impact for their generosity during recessions. This sentiment will require that nonprofit leaders focus on more effectively communicating audits and other measures of performance to stakeholders and potential donors. Furthermore, with online donations expected to rise to one-third of all giving, nonprofits will be under pressure to acquire the most up-to-date technologies for efficient giving, leading to more mergers in the sector. 2010 OUTLOOK FOR EXHIBITIONS  Stimulus funding, legislation for health care and climate change, public opinion toward government spending, military spending, and nonprofit performance in an uncertain economic environment will significantly impact exhibitions in 2010.  Nearly two-thirds of the stimulus money is expected to be spent in 2010.  GV was the best performing sector in 2009 and likely will repeat that performance in 2010.

In 2009, the GV sector was among the best performing sectors. It was the only sector to show improvement in both Exhibitors (2.9%) and Attendees (5.9%). However, the decline in NSF (-5.5%), Revenue (-5.1%), and Total (-0.4%) indicate the mixed performance in this sector that will likely continue in 2010. A number of forces will significantly impact exhibitions during 2010, including stimulus funding, legislation for health care and climate change, public opinion toward government spending, military spending, and nonprofit performance in an uncertain economic environment. Although there was a downturn in three of the five CEIR Index metrics, the most likely reason for the GV sector outperforming all other sectors is the stimulus funding, which has created many new government jobs and programs. With nearly two-thirds of the stimulus slated to be spent in 2010, it is likely exhibitions in this sector will do well in 2010. Pending legislation for health care and climate change could significantly affect exhibitions. Since both pieces of legislation in their current forms include significantly more government involvement in a variety of industries, this would foster the need for more exhibitions. However, it is still uncertain whether this legislation will pass. Moreover, the scale of these pieces of legislation could change dramatically over the upcoming months. Spending at the national, state and local levels has reached historic highs, while tax revenue has declined, thus prompting work force reductions and a cutback of non-essential and essential services. It is unclear how government is going to respond to this dilemma; however, further declines in revenues, coupled with public outrage, could translate to spending cutbacks at the state and local levels. Department of Defense spending is budgeted to increase significantly (6%) in 2010. That, along with additional investment in airport security and passenger and bag screening, portend continued exhibition success in this sector. It was military spending that led rebounds in the GV sector exhibitions in the years following the 2001 recession. The number of nonprofit organizations increased by 100,000 in 2009, leading to a greater number of exhibitions in this sub-sector. However, major drops in dues and other revenues for these organizations may lead to greater dependence on exhibition revenue.

Spending at the national, state and local levels has reached historic highs, while tax revenue has declined … GV SECTOR

CEIR Index Report

Building, Construction, Home and Repair (HM Sector) ECONOMIC OVERVIEW OF 2009  For the third consecutive year, the Building, Construction, Home and Repair sector declined in 2009.  According to the U.S. Census Bureau, total construction decreased 13.2% in 2009, with residential construction decreasing 18.6% and non-residential construction decreasing 10.9%.  Though home prices continued to fall in 2009, the annual rate of decline in home prices began to improve during the early part of the year. The Great Recession has hurt this sector more than any other. Lending statistics resulting from the mortgage meltdown have remained tight, even following the Economic Stabilization Act of 2008, which was intended to inject liquidity into the banking system. In 2009, the construction industry lost 934,000 jobs, or 13.7% of its workforce, according to the Federal Bureau of Labor Statistics (BLS). Just over 5.9 million were employed in the construction industry at the end of 2009. The hardest hit area was specialty contractors, which saw a 14% decrease in employment in 2009 from 4.3 million jobs in 2008. Residential building, which saw a 13.3% decrease in employment in 2008, had another 12.7% decrease in 2009, to 671,000 jobs. Constructionrelated retail trade reported a 4.9% loss in employment during 2009, especially in building materials and supply store jobs. Employment was also lost in electronics and appliance stores, decreasing 6.2%, and in furniture and home furnishing stores, decreasing 6.1%. In comparison, total non-farm employment declined 3.1% in 2009. Also in 2009, total construction decreased 13.2% to $900 billion from $1.04 trillion in 2008, according to the U.S. Census Bureau. Of this total, residential construction decreased 18.6% while non-residential construction decreased 10.9%. The U.S. Department of Commerce reported that November 2009 sales of new one-family homes were at a seasonally adjusted rate of 355,000, representing a decrease of 11.3% from October 2009 and a 9.0% year-over-year decrease. However, the inventory of new one-family homes on the market improved to a 7.9-month supply, compared to a 12.9-month supply at this same time in 2008.

HM SECTOR SUB-SECTORS building & construction 

home economics 

home furnishings & interior design 

housing 

landscape & garden supplies 

stores & store fittings 

woodworking

Housing starts were also down in 2009, declining 12.4%, from 655,000 in November 2008 to 574,000 in November 2009. Total retail sales for building materials and hardware stores decreased 9.3% in 2009 following a decline of 8.7% in 2008. According to Standard & Poor’s/Case-Shiller U.S. National Home Price Index, the rate at which home prices were falling began to improve during the early part of 2009. Though home prices continued to drop in 2009, they declined at a slower pace as compared to the rate of decline seen in 2008. From the peaks reached during the summer of 2006, the Index hit its low mark in April of 2009. Overall, the 20-City Index has fallen 33% and the 10-City Index has declined 34% since their 2006 highs.

The Great Recession has hurt this sector more than any other.

HM SECTOR

CEIR Index Report

The following two graphs compare the HM sector performance to the overall exhibition industry performance for the period 2000-2009.

HM SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the HM Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. HM SECTOR – Building, Construction, Home and Repair Metric

2000

2001

2002

NSF

100.0

106.6

6.6

96.9

Exhibitors

100.0

102.6

2.6

Attendees

100.0

88.7

Revenue

100.0

Total

100.0

2003

2004

2005

2006

2007

2008

-9.2 108.1

11.6

123.6

14.3

130.7

5.7

138.3

5.8

133.9

-3.2

125.8

97.5

-5.0 110.9

13.8

119.3

7.5

128.4

7.7

128.0

-0.3

126.4

-1.2

-11.3

90.2

1.8

95.5

5.9

105.5

10.5

114.1

8.2

125.1

9.6

116.5

101.5

1.5

87.4

-13.9

92.6

6.0

106.1

14.6

130.2

22.7

158.6

21.8

99.8

-0.2

93.0

-6.9 101.8

9.5

113.6

11.6

125.9

10.8

137.5

9.2

NSF NSF for the HM sector increased at a 0.3% CAGR from 2000 to 2009, on par with the performance of NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (18%) in 2009, following decreases of (6.1%) and (3.2%) in 2008 and 2007 respectively. NSF performance for the HM sector in 2009 was relatively on par with a (13.9%) decline posted by the overall exhibition industry.

2009

CAGR

-6.1 103.2

-18.0

0.3%

115.8

-8.4

96.5

-16.6 -0.4%

-6.8

101.6

-12.8

88.8

-12.6 -1.3%

162.6

2.6

143.4

-11.8 125.9

-12.2

2.6%

134.5

-2.2

121.3

-9.8 103.3

-14.9

0.4%

Some key insights into the performance of the HM sector in 2009:  NSF for 79% of all HM exhibitions was down for the year, and 69% of these shows reported NSF declined more than 10%, with 52% reporting decreases in NSF of greater than 20%.  NSF for 91% of HM events in Q1 was down, and 73% of these shows declined more than 10%.  NSF for 43% of HM events in Q4 was either flat or up.  HM shows in the 10,000 to 25,000 net square feet of space range fared better than average, with 57% posting either flat or up NSF. HM SECTOR

CEIR Index Report

Exhibitors Exhibitors for the HM sector declined at a (0.4%) CAGR from 2000 to 2009, which was fairly even with a (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector declined (16.6%) in 2009, following three consecutive years of annual decreases, including an (8.4%) decline in 2008. Exhibitors performance for the HM sector in 2009 was slightly worse than the (11.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the HM sector in 2009:  Exhibitors for 72% of all HM exhibitions was down for the year, and 59% of these shows reported Exhibitors declined more than 10%, with 52% reporting decreases in Exhibitors of greater than 20%.

Attendees for the HM sector declined at a (1.3%) CAGR from 2000 to 2009, underperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the HM sector declined (12.6%) versus 2008, marking the third straight annual decline. The decline in Attendees for the HM sector in 2009 was larger than the (8.3%) loss posted by the overall exhibition industry. Some key insights into the performance of the HM sector in 2009:  Attendees for 82% of all HM exhibitions was down for the year, and 54% of these shows reported Attendees declined more than 10%, with 29% reporting decreases in Attendees of greater than 20%.

 Exhibitors for 73% of HM events in Q1 was down, and 45% of these shows declined more than 10%.

 Attendees for 91% of HM events in Q1 was down, and 54% of these shows declined more than 10%.

 Exhibitors for 43% of HM events in Q4 was either flat or up.

 Attendees for 43% of HM events in Q4 was either flat or up.

 HM shows in the 10,000 to 25,000 net square feet of space range fared better than average, with 71% showing either flat or up in Exhibitors.

 HM shows in the 10,000 to 25,000 net square feet of space range fared better than average, with 43% either flat or up in Attendees.

Revenue Attendees HM SECTOR

CEIR Index Report

Revenue for the HM sector increased at a CAGR of 2.6% from 2000 to 2009, outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the HM sector declined (12.2%) in 2009, following an (11.8%) decrease in 2008 versus 2007. Revenue performance for the HM sector in 2009 was slightly better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the HM sector in 2009:  Revenue for 62% of all HM exhibitions was down for the year, and 62% of these shows reported Revenue declined more than 10%, with 31% reporting decreases in Revenue of greater than 20%.  Revenue for 67% of HM events in Q1 was down, and 67% of these shows declined more than 10%.  HM shows in the 10,000 to 25,000 net square feet of space range fared better than average, with 67% either flat or up in Revenue. Total 2000–2009: The Total for the HM sector increased at a CAGR of 0.4% from 2000 to 2009, similar to the performance of the overall exhibition industry, which remained relatively flat over the 10-year period. Growth in Total for the HM sector was driven primarily by a CAGR gain of 2.6% in Revenue from 2000 to 2009. 2008–2009: The Total for the HM sector declined (14.9%) in 2009 versus 2008, marking the third annual decrease for the sector. Prior to 2007, the sector had grown each year since 2002. Total performance for the HM sector in 2009 was similar to the (12.5%) decline posted by the overall exhibition industry. All metrics for the HM sector posted double-digit percentage decreases in 2009, led by an (18%) decline in NSF.

2010 OUTLOOK  It is expected that the Building, Construction, Home and Repair sector will grow by approximately 0.2% during 2010.  Though many economists believe that the housing market has reached bottom, for a variety of reasons it will take years to regain the level of construction observed during the pre-recession years. The Building, Construction, Home and Repair sector is a beacon for the U.S. economy, and it was doubly hit by the real estate crash and subsequent global recession. It is one of the few major sectors that are not positively correlated with the business cycle. After three years of continuous decline, the construction and building market is expected to improve in 2010, mostly due to federally funded public construction, which will partially offset the persistent decline in construction of non-residential buildings, particularly commercial and office buildings.

The Building, Construction, Home and Repair sector is a beacon for the U.S. economy … Gross Domestic Product (GDP) is forecast to grow 2.4% during 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, rising from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. Unemployment is expected to rise in 2010 to around 10.0% before falling again the following year. It is expected that the Building, Construction, Home and Repair sector will remain relatively flat in 2010. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures, and sector data. These findings are consistent with those from other forecasts related to this sector.

It is expected that the Building, Construction, Home and Repair sector will remain relatively flat in 2010.

All metrics for the HM sector posted double-digit percentage decreases in 2009 …

HM SECTOR

CEIR Index Report

The 2009 federal economic stimulus package includes more than $135 billion for construction-related activities. Although the money does not directly target construction, it is intended to create jobs and offset state budget cuts in public investments and infrastructure projects. Ken Simonson, chief economist for the Association of General Contractors of America, estimates that $49 billion will go to the transportation segment in construction, $35 billion to buildings, $30 billion to energy and technology, and $21 billion to water and environment. Total construction starts in 2010 are expected to grow 11% to $466 billion, following a estimated 25% decline for 2009, according to McGraw-Hill Construction. However, federal money is offset by worsening state budgets while foreclosures and unemployment are keeping vacancy rates high. Thus, it will take years to regain the level of construction observed during the pre-recession years. Many economists believe that the housing market has reached bottom. The ARRA of 2009 established a tax credit of up to $8,000 for first-time home buyers with purchases made before December 1, 2009. The Worker, Homeownership, and Business Assistance Act of 2009, signed in November 2009, extended the deadline to June 1, 2010. Also included is a tax credit of up to $6,500 for repeat home buyers. The effect of the tax credit, already evident in the rising Standard & Poor/Case-Shiller Home Price Index, will continue to improve the housing market in 2010. However, residential vacancy rates remain high, with the rental vacancy rate at 11.1% in Q3 of 2009 and the homeowner vacancy rate at 2.6%, according to the U.S. Census Bureau. About 14.5% of all housing units in the United States were vacant at the end of Q3. This percentage has remained relatively constant since early 2008 and will persist in 2010. Due to the record high excess inventory and other economic factors, residential construction will improve modestly in 2010. Unemployment is expected to remain high in this sector, mirroring the overall unemployment rate of 10%. Foreclosures remain a problem in many areas that experienced housing bubbles in earlier years. Residential construction, like other construction segments, depends heavily on government spending. While private residential construction spending has remained stagnant in 2009, public spending has grown since 2008.

The Federal Reserve’s mortgage purchase program was extended and expanded to $1.25 trillion. Its purchase of agency mortgage-backed securities will gradually slow down and phase out by the end of Q1 2010, which will likely slow housing purchases and housing starts. Nonetheless, the outlook for 2010 is positive for residential construction. Standard & Poor’s predicts that housing starts will reach 680,000 in 2010, reflecting a 21% increase over an estimated level of 560,000 in 2009. Fitch Ratings projects a 15.1% increase in total housing starts and a 19.8% increase in new home sales in 2010. McGraw-Hill Construction projects that single family housing will rise 32% in dollars and 30% in number of units in 2010, while multi-family housing will rise 16% in dollars and14% in units for the year. In FMI’s Construction Outlook 3rd Quarter Report, spending on residential construction is estimated to be up 3% in 2010, putting the segment back into growth after three consecutive years of steep declines. Construction of non-residential building has experienced the sharpest decline in 2009, and this is a trend that is likely to continue in 2010, with the largest declines in lodging, office and commercial buildings. While the improved job market will drive down vacancy rates, new construction will rise slowly due to earlier overbuilding. Historically, nonresidential construction has followed changes in the economic condition of the U.S. but experiences large swings of overbuilding and corrections. Due to the high levels of overbuilding in 2007–2008, the correction period is likely to be long and steep. FMI finds that construction of non-residential buildings lags behind the general economy by 18 months and estimates a 16% decline in spending in non-residential building for 2010. McGraw-Hill Construction predicts that commercial buildings will drop by 4% in dollars. Furthermore, manufacturing buildings will also drop by 14% in dollars. Other segments in nonresidential building construction, such as education, health care and public safety, will see smaller declines due to federal spending to offset tightening state budges (see Government, Public and Nonprofit Services sector). Public works construction will continue to grow in 2010 with the help of federal spending and increased interest and funds in environmental conservation and alternative energy. Rising population is also mandating infrastructure projects in sewage, water and power. Expectations are that public works expenditures will rise by about 14%

HM SECTOR

CEIR Index Report

during 2010. After three years in decline, home improvement spending is expected to increase during 2010. Public construction and higher home sales in 2010 will offset some of the steep decline in commercial construction spending. Fitch Ratings projects spending in the home improvements sector to increase 3.5% in 2010.

By reviewing historical information provided in the CEIR Index following the most recent recession from March 2001 to November 2001, the key performance measures for the HM sector declined in 2002 as compared to 2001: the Total declined 6.9%, NSF, 9.2%; Exhibitors, 5.0%; and Revenue, 13.9%. Interestingly, however, Attendance increased 1.8% in 2002.

2010 OUTLOOK FOR EXHIBITIONS

By 2003, all four key industry metrics for the HM sector had either returned to or risen above pre-recessionary levels, except for Revenue, which was still down 8.8% versus 2001. By 2004, however, even Revenue had returned to pre-recessionary levels.

 The HM sector has been in decline since 2007 and the rate of decline as measured by several of the CEIR Index metrics increased in 2009. Recovery to 2006 levels is likely several years away.  Spending due to the ARRA will increase in 2010 for highway construction and high-speed rail. Exhibitions related to these projects may benefit. The Building, Construction, Home and Repair sector comprises 240 business-to-business exhibitions, or 2.4% of the total business-to-business exhibition industry. More importantly, it is the beginning of a food chain for the exhibition industry and the U.S. economy. If home and commercial construction is robust, that drives other industries, from raw materials to building materials such as flooring and roofing, as well as appliances, floor coverings, furniture and furnishings. Conversely, those industries suffer when building and construction is depressed. Given the current state of the housing and construction markets, it is not surprising that this sector has been one of the largest contributors to the decline of the overall exhibition industry in both 2008 and 2009. With a Total decline of 14.9% and decreases of 18.0%, 16.6%, 12.6% and 12.2% in NSF, Exhibitors, Attendance, and Revenue, respectively, this sector was one of the worst performing in 2009. In fact, only the CG and FD sectors saw greater declines in Total for 2009. The HM sector had the greatest declines in NSF and Exhibitors, and only the BZ and IT sectors had greater declines in Attendance. For Revenue, the sector was down less than the average for the overall industry.

Due to the magnitude of the Great Recession’s impact on the economy, recovery time will be much greater for the Building, Construction, Home and Repair sector in the coming years compared with the years following the previous recession. The NSF, Attendance and Total metrics have declined each of the past three years, with the rate of decline for NSF tripling in 2010 as compared to 2009. For the past four years, the Exhibitor metric has declined, and for the past two years, the Revenue metric has decreased. Since 2007, the Total for the sector decreased at a CAGR of 8.4%. The home repair portion of this sector frequently benefits when new homes sales are slow, as homeowners upgrade their existing homes rather than buying new ones. Homeowners may also invest in their homes in preparation for a sale, where certain key features are imperative in order to successfully sell in an overcrowded market. Ironically, the industry sector that led the U.S. and the exhibition business out of the last recession is the industry that led us into the Great Recession, and it is most likely the industry that will have to lead us out. It is unlikely that there will be a significant sustained recovery until the building and construction industry can lead it.

HM SECTOR

CEIR Index Report

Industrial/Heavy Machinery and Finished Business Outputs (ID Sector) ECONOMIC OVERVIEW OF 2009  Industrial machinery production decreased in both 2008 and 2009, while manufacturing and machinery output decreased in 2009.  While new orders for manufactured goods increased towards the end of 2009, the year-todate value of shipments was down significantly as compared to 2008. The Industrial/Heavy Machinery and Finished Business Inputs sector has been one of the foundations of the U.S. economy. This sector has been central to the creation of jobs and economic growth. According to the National Association of Manufacturing (NAM), every dollar spent to manufacture goods creates $1.43 of economic activity in other sectors. For 2009, the Federal Reserve’s report on industrial production and capacity utilization showed that industrial production for the machinery sub-sector decreased 5.1% versus 2008. In 2008, the year-over-year decline was 10%. Output in total manufacturing decreased 4.9% in 2009. Capacity utilization across all industries averaged 71.3%, representing a level 9.6% below the average from 1972 to 2008. Output also decreased 19.7% in the machinery subsector, with capacity utilization averaging 57.6% in 2009, 21% below its average from 1972 to 2008. As a result of extended plant shutdowns, plant closures and the overall struggles of the automobile industry, the sale of motor vehicle and automotive parts products declined 6.9% in 2009 through November versus the same period last year. From January to October 2009, the U.S. trade deficit for goods and services was $302.6 billion, down $308.2 billion from the $610.8 billion deficit over the same period in 2008, according to the U.S. Department of Commerce. The goods deficit was $416.7 billion during the same period, a decrease of $316.1 billion from the $732.8 billion deficit over the same period in 2008. Through the first 10 months of 2009, exports of goods decreased $237.3 billion year-over-year from the same period of 2008. Specifically, industrial supplies and materials decreased $96.6 billion and capital goods decreased $65.2 billion, while a $40.4 billion decrease occurred in automotive goods. New orders for manufactured goods increased three consecutive months from September to November 2009. According to the U.S. Census Bureau, the year-to-date value of manufacturers’ shipments was $4.0 trillion ending

ID SECTOR SUB-SECTORS air conditioning, heating & refrigeration 

manufacturing 

metal working & coatings technology 

packaging 

robotics 

waste management 

welding November 2009, down 17% from the same period in 2008. The year-to-date value of fabricated metal products decreased 13.3% to $266.1 billion in 2009, from $306.8 billion in 2008. Industrial machinery decreased 24.8% year-to-date, from $31.6 billion in the same period of 2008 to $23.7 billion in 2009. HVAC equipment shipments decreased 15.4% in value to $36.7 billion from January to November 2009 versus the same period of 2008. The value of metalworking machinery shipments decreased 31.7% to $18.1 billion from January to November 2009 versus the same period of 2008. According to the Bureau of Labor Statistics (BLS), the Producer Price Index (PPI) for the 12 months ending November 2009 increased 2.4% for finished goods, 1.4% for intermediate goods and 5.7% for crude goods. The PPI for capital equipment rose 0.4% in 2009. During 2009, manufacturing jobs decreased 9.9%, accounting for a loss of 1.3 million jobs. Primary metals lost 14.8% of its workforce, while machinery lost 15.7% and electrical equipment and appliances lost 11.7% in 2009. Waste management employment rose 0.9% to 365,000 in 2009. ID SECTOR

CEIR Index Report

The following two graphs compare the ID sector performance to the overall exhibition industry performance for the period 2000-2009.

ID SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the ID Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. ID SECTOR – Industrial/Heavy Machinery and Finished Business Outputs Metric

2000

2001

2002

2003

NSF

100.0

100.7

0.7

108.6

7.9

90.6

Exhibitors

100.0

102.5

2.5

112.4

9.7

Attendees

100.0

111.2

11.2

131.1

Revenue

100.0

99.1

-0.9

107.6

8.6

Total

100.0

103.4

3.4

114.9

11.2

2004

2005

2006

2007

2008

2009

CAGR

-16.6 108.1

19.3

91.3

-15.6

97.2

6.5

101.8

4.7 105.7

3.9

98.6

-6.7

-0.2%

98.9

-12.0 123.1

24.4

113.4

-7.8 118.8

4.7

119.6

0.7 125.0

4.5

121.9

-2.4

2.2%

17.9 118.8

-9.4 135.9

14.4

157.9

16.2 153.7

-2.6

152.3

-0.9 147.8

-3.0

138.2

-6.5

3.7%

86.3

-19.8 102.4

18.7

84.0

-18.0

87.0

3.5

89.5

2.9

88.7

-0.9

82.6

-6.9

-2.1%

98.6

-14.2 117.4

19.0

111.6

-4.9 115.0

3.0

117.1

1.9 118.4

1.1

111.8

-5.6

1.2%

NSF NSF for the ID sector decreased at a (0.2%) CAGR from 2000 to 2009, underperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (6.7%) in 2009 following three straight years of increases, including a gain of 3.9% in 2008 over 2007. NSF performance for the ID sector in 2009 was better than the (13.9%) decline posted by the overall exhibition industry.

Some key insights into the performance of the ID sector in 2009:  NSF for 64% of all ID exhibitions was down for the year, and 48% of these shows reported NSF declined more than 10%, with 24% of events posting declines of 20+%.  NSF for 60% of all facilities shows was down, and 50% of these exhibitions reported NSF declined more than 10%, with 30% of events posting declines of 20+%.

ID SECTOR

CEIR Index Report

 NSF for 71% of all manufacturing shows was down, and 71% of these exhibitions reported NSF declined more than 10%, with 43% of events posting declines of 20+%.  NSF for 56% of shows in the 10,000 to 25,000 net square feet of space range was down, and 56% of these exhibitions reported NSF declined more than 10%, with 22% of events posting declines of 20+%. Exhibitors Exhibitors for the ID sector increased at a 2.2% CAGR from 2000 to 2009, far outperforming Exhibitors for the overall exhibition industry, which declined (0.6%) on a CAGR basis across the period. Exhibitors for the sector declined (2.4%) in 2009 following three consecutive years of gains, including a 4.5% increase in 2008 over 2007. Exhibitors performance for the ID sector in 2009 was significantly better than the (11.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the ID sector in 2009:  Exhibitors for 64% of all ID exhibitions was down for the year, and 44% of these shows reported Exhibitors declined more than 10%, with 20% of events posting declines of 20+%.  Exhibitors for 50% of all facilities shows was down, and 50% of these exhibitions reported Exhibitors declined more than 10%, with 20% of events posting declines of 20+%.

Attendees Attendees for the ID sector grew at a 3.7% CAGR from 2000 to 2009, far outperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the ID sector declined (6.5%) versus 2008, marking the fourth straight annual decline. The decrease in Attendees for the ID sector in 2009, however, was smaller than the (8.3%) loss posted by the overall exhibition industry. Some key insights into the performance of the ID sector in 2009:  Attendees for 72% of all ID exhibitions was down for the year, and 48% of these shows reported Attendees declined more than 10%, with 20% of events posting declines of 20+%.  Attendees for 60% of all facilities shows was down, and 40% of these exhibitions reported Attendees declined more than 10%, with 20% of events posting declines of 20+%.  Attendees for 86% of all manufacturing shows was down, and 86% of these exhibitions reported Attendees declined more than 10%, with 28% of events posting declines of 20+%.  Attendees for 56% of shows in the 10,000 to 25,000 net square feet of space range was down, and 44% of these exhibitions reported Attendees declined more than 10%, with 22% of events posting declines of 20+%.

 Exhibitors for 86% of all manufacturing shows was down, and 43% of these exhibitions reported Exhibitors declined more than 10%, with 14% of events posting declines of 20+%.  Exhibitors for 56% of shows in the 10,000 to 25,000 net square feet of space range was down, and 44% of these exhibitions reported Exhibitors declined more than 10%, with 11% of events posting declines of 20+%.

ID SECTOR

CEIR Index Report

Revenue Revenue for the ID sector decreased at a CAGR of (2.1%) from 2000 to 2009, well underperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the ID sector declined (6.9%) in 2009, following a small (0.9%) decrease in 2008 versus 2007. Revenue performance for the ID sector in 2009 was better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the ID sector in 2009:  Revenue for 75% of all ID exhibitions was down for the year, and 63% of these shows reported Revenue declined more than 10%. Interestingly, no ID events posted declines of 20+% in Revenue.  Revenue for 80% of all manufacturing shows was down, and 60% of these exhibitions reported Revenue declined more than 10%. Interestingly, no manufacturing shows posted declines in Revenue of 20+%. Total 2000–2009: The Total for the ID sector increased at a CAGR of 1.2% from 2000 to 2009, outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. Growth in Total for the ID sector was driven by CAGR gains of 3.7% and 2.2% in Attendees and Exhibitors respectively from 2000 to 2009. 2008–2009: The Total for the ID sector declined (5.6%) in 2009 versus 2008, following three straight years of gains, including a 1.1% increase in 2008 over 2007. Total performance for the ID sector in 2009 was significantly better than the (12.5%) decline posted by the overall exhibition industry.

2010 OUTLOOK  It is expected that the Industrial/Heavy Machinery and Finished Business Inputs sector will grow 1.9% during 2010.  Capital expenditures are forecast to decrease 4% in 2010. Despite the overall projected decrease in capital expenditures, 10 industries, including electrical equipment, appliances and components, machinery, and fabricated metal products, are forecast to increase capital expenditures for the year. The Industrial/Heavy Machinery and Finished Business Inputs sector is an important driver of future manufacturing and sales in the U.S. economy. Gross Domestic Product (GDP) is forecast to grow 2.4% during 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see expanded growth, increasing from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. However, unemployment is expected to rise in 2010 to around 10.0% before falling again the following year. It is expected that the Industrial/Heavy Machinery and Finished Business Inputs sector will grow 1.9% during 2010. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures and sector data. These findings are consistent with those from other forecasts related to this sector. “The ISM Purchasing Managers Index is sending positive signals for 2010, having reached 58.4 in January, marking its highest level since 2004. A level above 50 for the ISM Index indicates that the manufacturing sector is expanding. Most markets served by the packaging industry are expected to grow 3% to 4% in 2010, which bodes well for Pack Expo this fall.” – Charles D. Yuska, President & CEO, Packaging Machinery Manufacturers Institute

All metrics for the ID sector posted decreases in 2009, led by (6.9%), (6.7%), and (6.5%) declines in Revenue, NSF and Attendees respectively.

ID SECTOR

CEIR Index Report

The U.S. manufacturing output sub-sector is forecast to increase 1.6% in 2010, following a decline of 10% to 12% in 2009. According to IHS Global Insight, durable goods manufacturing is expected to grow 2.6% in 2010 after a 16.7% drop in 2009, while nondurable goods output is expected to increase 0.3% in 2010 after an estimated decline of 7.2% in 2009. An increase in manufacturing output is likely to be beneficial to the Industrial/Heavy Machinery and Finished Business Inputs sector, as increased manufacturing activity is likely to prompt an increase in capital expenditures. A December 2009 report by the Institute for Supply Management (ISM) projects manufacturing revenue to increase 5.7% and capital expenditures to decrease 4% in 2010. Despite the overall projected decrease in capital expenditures, 10 industries, including electrical equipment, appliances and components, machinery, and fabricated metal products, are forecast to increase capital expenditures for the year. The manufacturing sub-sector has a positive outlook on 2010, as 60% of respondents forecast business to improve in 2010 as compared to 2009, and 31% foresee no change. Respondents project an average nominal increase of 12% in their firmsâ&#x20AC;&#x2122; revenues in 2010, and revenues are expected to increase in 13 of 18 industries, including electrical equipment, appliances and components, chemical products, machinery, and fabricated metal products. Employment in manufacturing is expected to increase 1.5% in 2010, while labor and benefits costs are expected to increase an average of 14%. Production capacity is expected to increase by 2.7% for the year.

In Q2 2009, robotics companies suffered a 43% decrease in unit orders and a 51% decrease in revenue compared to Q2 2008, according to the Robotics Industries Association. This decline was largely due to the slowdown in the automotive sector, usually the largest purchaser of robots and automation equipment. However, the association expects to see improvements in 2010, led by an expected shift from large manufacturers to smallersized companies and high-value producers. In addition, robotics is gaining a notable role in the U.S. military. According to the National Defense Authorization Act of 2001, robots are to make up one-third of the operational aircraft in the armed forces by 2010 and one-third of the ground combat vehicles by 2015. The welding sub-sector is likely to see an improvement in 2010 due to significant increases in government spending on public works construction. The ARRA dedicated $285 billion to infrastructure repair and $10 billion to mass transit and railways, providing increased opportunities for the welding industry. Another potential boon to this sector is the recent Obama administration announcement that pushes a sevenpoint plan to slow manufacturing job losses in the U.S., including better training for factory workers, further opening up of overseas markets and defending intellectual property overseas. It is expected that much of this impact will be felt beyond 2010, as it will take time to get the plan in place.

ID SECTOR

CEIR Index Report

2010 OUTLOOK FOR EXHIBITIONS  Historically, performance in this sector tends to lag overall economic performance.  Less than 25% of ARRA funds have been allocated. This sector should benefit as allocated funds are spent and additional funds become allocated. Industrial/Heavy Machinery and Finished Business Inputs is one of the smaller sectors of the CEIR Index, representing 4.4% of the total universe of business-tobusiness exhibitions. However, because of the enormous size and weight of the equipment exhibited at these events, these shows are among the largest exhibitions by net square feet. Most are international in scope and some are held biennially. By reviewing historical information provided in the CEIR Index, an estimation of the Great Recession’s impact on this sector can be forecast. In the year following the most recent recession, from March 2001 to November 2001, the five key exhibition metrics measured by the CEIR Index were all up strongly for the ID sector versus the previous year. Total was up 11.2%, NSF was up 7.9%, Exhibitors was up 9.7%, Attendance was up 17.9%, and Revenue was up 8.6%. However, there was a sharp decrease across the metrics for the ID sector in 2003 as compared to 2002: Total was down 14.2%, NSF was down 16.6%, Exhibitors was down 12.0%, Attendance was down 9.4%, and Revenue was down 19.8%. It appears that there may be a lag between the recessionary economy and its effect on this sector’s exhibition performance. By 2004, most of the core metrics had rebounded from their losses in 2003.

All metrics declined for this sector in 2009. Total decreased 5.6%, NSF decreased 6.7%, Exhibitors decreased 2.4%, Attendance decreased 6.5%, and Revenue decreased 6.9%. However, this sector has actually performed well in relation to the performance of the other sectors in the CEIR Index. The ARRA contains provisions that should eventually benefit this sector and possibly help drive improvement in exhibition performance. However, by the time the elements of the legislation are implemented, the benefits may come too late to positively impact the sector in 2010. Two biennial bellweather events for this sector will be held in the fall of 2010 – IMTS and Pack Expo. While significant additional ARRA funds likely will not have a direct effect by then, the knowledge that those funds are in the pipeline could have a positive impact on these events. Likewise, the value of the U.S. dollar against other world currencies could increase the potential this sector has to produce exports, provided U.S. visa restrictions are eased to accommodate buyers from overseas to attend the industry exhibitions.

ID SECTOR

CEIR Index Report

Communications and Information Technology (IT Sector) ECONOMIC OVERVIEW OF 2009  With the Great Recession weakening many smaller technology companies, major computer technology companies used the opportunity to acquire and take over smaller firms.  Throughout the publishing and broadcasting industries, traditional forms of media and communication saw dramatic declines in revenue, while new forms of media expanded. Overall, 2009 was a challenging year for the Communications and Information Technology sector. According to the Bureau of Labor Statistics, employment for this sector decreased 5.8% from 3.0 million in 2008 to 2.8 million in 2009. This drop mirrors declines last seen during 2002 and 2003. In fact, the last time employment increased in this industry was during 2000. Particularly hard hit were publishers – book publishers, newspaper publishers and periodical publishers all saw drops in employment of 19.5%, 16.7% and 12.5% respectively. Employment decreased 8.0% in nonInternet broadcasting, 12.2% in radio broadcasting, 8.3% in television broadcasting and 2.6% in cable and subscription programming. Similarly, employment in the telecommunications industry, which accounts for nearly 35% of the employees in this sector, was down 4.6%. By contrast, employment in several other IT industries fared well despite the effects of the Great Recession. In 2009, employment increased for software publishers by 4.1% and remained relatively flat for the motion picture and sounding industries. A particular bright spot was for motion picture and video production, which saw an 8.0% increase in employment, representing the largest increase in more than a decade. In other areas of the sector, the employment picture was mixed. For example, employment in the Internet publishing and broadcasting industry rose 4.5% for the year, while employment for the Web search portals and wireless telecommunication carriers industry was relatively flat. “Exhibitions should be the preferred medium for buyers and sellers to meet and achieve President Obama’s goal of doubling exports in five years.” – Gary Shapiro, President & CEO, Consumer Electronics Association/CES

IT SECTOR SUB-SECTORS communications 

computers & computer applications 

electrical & electronics 

publishing 

radio, tv & cable 

telecommunications 

telephone In terms of 2009 revenue, according to the Datamotivation Group, results for the various components were mixed, as indicated by the following:  The software industry declined (3.8%).  The wireless communications industry declined (1.6%).  The cable TV industry declined (0.2%).  Publishing revenue increased 1.4%, with Internet publishing leading the way with a rise of 2.6%.  The mobile phone units industry rose 1.0%. For the most part, technology firms were hardest hit during the first two quarters of 2009, with significant losses and major layoffs, and then returned to profitability in the final two quarters of the year. Year-over-year profits for Q1 of 2010 are expected to grow by nearly 90% among Standard & Poor 500 technology companies.

IT SECTOR

CEIR Index Report

The following two graphs compare the IT sector performance to the overall exhibition industry performance for the period 2000-2009.

IT SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the IT Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. IT SECTOR – Communication and Information Technology Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

NSF

100.0

95.5

-4.5

84.3

-11.7

76.0

-9.8

77.9

2.5

76.7

-1.6

70.7

-7.9

74.3

5.2

80.5

8.2

69.1

-14.2 -4.0%

Exhibitors

100.0

94.4

-5.6

80.0

-15.3

78.3

-2.1

78.4

0.1

85.8

9.4

84.3

-1.7

87.6

3.9

92.7

5.8

79.7

-14.0 -2.5%

Attendees

100.0

90.4

-9.6

76.9

-14.9

82.1

6.8

80.0

-2.6

78.9

-1.4

85.8

8.8

92.9

8.2 102.5

10.4

89.1

-13.1 -1.3%

Revenue

100.0

0.0

85.2

-14.8

73.7

-13.5

72.1

-2.2

80.9

12.3

92.6

14.4 102.1

10.2 117.1

Total

100.0

95.1

-4.9

81.6

-14.2

77.5

-5.0

77.1

-0.6

80.6

4.5

83.3

The acquisitions and takeovers, highlighted by the HP acquisition of EDS in 2008, continued in 2009. Many of the major computer technology companies were involved in takeovers, including IBM’s acquisitions of various security firms, Dell’s takeover of an information services provider (Perot Systems), and Oracle’s buyout of Sun Microsystems. Furthermore, despite the economic downtown, technology firms continued to make strong investments in new computing platforms, such as AT&T and IBM opening up cloud systems to compete against companies such as Microsoft and Google in this emerging area. These various changes illustrated the continued diversification of technology solutions offered by the major computer and information technology companies.

3.4

89.0

6.9

97.8

14.7 100.5 9.8

84.2

-14.2

CAGR

0.1%

-13.8 -1.9%

Throughout the publishing and broadcasting industries, there were dramatic decreases in traditional forms of communication (e.g., print) and moderate increases in evolving forms of communications (e.g., digital). A case in point is the newspaper industry, where revenue dropped 7% and employment decreased 14% in 2009. Following a trend in place for well over a decade, print newspaper readership continued to decline in 2009. “Our results indicate that we are turning the corner. Attendance is growing again and that should help drive stronger sales in 2011. In general, the pace of change in the technology sector is as rapid as ever, so shows that stay on the leading edge will have opportunities to grow in the coming years.” – Chris Brown, Executive Vice President, Conventions and Business Operations, National Association of Broadcasters IT SECTOR

CEIR Index Report

Furthermore, there was a decline in the public’s view of news reporting accuracy, with just 29% saying news organizations provided accurate news. Newspapers continued to invest more in business models focusing on online sources of revenue during 2009. For example, The New York Times rapidly gained 1.2 million followers on its Twitter fashion feed – more than the number of regular newspaper subscribers. The Newspaper Association of America reported 74 million unique monthly visitors to newspaper Web sites in Q3 of 2009, compared to 68 million unique monthly visitors on average during the same period of 2008. Products in the IT sector that showed significant growth included Netbooks, smartphones, mobile phone apps, e-books, social networking Web sites, 3-D movies, and new personal computing operating systems. Netbooks sold more than 33 million units in 2009, more than doubling the number sold in 2008. By the end of 2009, 17% of the American adult population owned smartphones, compared with just 11% at the end of 2008. The growth in smartphone ownership and usage is largely due to enhanced functionality that allows users to operate these devices like PCs and to more reliable wireless networks. The development of thousands of mobile applications, or apps, was also a major factor contributing to the dramatic growth in the sale of smartphones. Just one year after opening, the Apple iTunes App Store had sold nearly two billion apps. The success of the iTunes App Store spurred app stores for other mobile platforms (e.g., BlackBerry, Android, Palm).

NSF NSF for the IT sector decreased at a (4%) CAGR from 2000 to 2009, well underperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (14.2%) in 2009, following increases of 8.2% and 5.2% in 2008 and 2007 respectively. NSF performance for the IT sector in 2009 was on par with a (13.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the IT sector in 2009:  NSF for 75% of all IT exhibitions was down for the year, and 67% of these shows reported NSF declined more than 10%, with 46% showing declines of greater than 20%.  NSF for 81% of computer-related events was down, and 75% of these shows reported NSF declined more than 10%, with 50% showing declines of greater than 20%.  NSF for 100% of IT shows with more than 100,000 net square feet of space was down by more than 10%.

Gaming has also grown significantly through mobile channels via platforms such as Facebook and the iPhone. Revenue for e-books increased 235% in Q3 2009 compared to Q3 2008. Social networking Web sites continued to grow rapidly as well. Facebook more than doubled its number of users, from 150 million to 350 million, and the success of Twitter illustrated the demand for sending and receiving messages in real time. A critical mass of theaters adopted the necessary technologies to project movies in 3D, fostering such blockbuster films as Avatar and Monsters vs. Aliens. The advent of 3D television is certain to spark new sales and likely the remaking of films in a 3D format for home viewing. Finally, new operating systems for personal computers were released or developed by the industry’s leading companies (e.g., Microsoft’s Windows 7, Mac’s OS upgrade Snow Leopard and Google’s Chrome OS).

IT SECTOR

CEIR Index Report

Exhibitors Exhibitors for the IT sector declined at a (2.5%) CAGR from 2000 to 2009, as compared to a (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector declined (14%) in 2009 following two consecutive years of gains, including a 5.8% increase in 2008 over 2007. Exhibitors performance for the IT sector in 2009 was similar to the (11.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the IT sector in 2009:  Exhibitors for 71% of all IT exhibitions was down for the year, and 63% of these shows reported Exhibitors declined more than 10%, with 42% showing declines of greater than 20%.

 Attendees for 67% of IT shows with more than 100,000 net square feet of space was up. Revenue Revenue for the IT sector was relatively flat from 2000 to 2009, on par with Revenue for the overall exhibition industry, which also remained relatively flat over the 10-year period. Revenue for the IT sector declined (14.2%) in 2009, following four straight double-digit percentage increases in Revenue for the sector, including a 14.7% gain in 2008 versus 2007. Revenue performance for the IT sector in 2009 was slightly better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the IT sector in 2009:

 Exhibitors for 81% of computer-related events was down, and 75% of these shows reported Exhibitors declined more than 10%, with 50% showing declines of greater than 20%.

 Revenue for 71% of all IT exhibitions was down for the year, and 64% of these shows reported Revenue declined more than 10%, with 36% showing declines of greater than 20%.

 Exhibitors for 100% of IT shows with more than 100,000 net square feet of space was down, and 67% of these events reported declines of 10+% in Exhibitors.

 Revenue for 83% of computer-related events was down, and 75% of these shows reported Revenue declined more than 10%, with 42% showing declines of greater than 20%.

Attendees

Total

Attendees for the IT sector decreased at a (1.3%) CAGR from 2000 to 2009, well underperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period.

2000–2009: The Total for the IT sector decreased at a CAGR of (1.9%) from 2000 to 2009, far underperforming the overall exhibition industry, which remained relatively flat over the 10-year period. Additionally, the IT sector was one of the worst performing sectors since the Index started in 2000.

In 2009, Attendees for the IT sector declined (13.1%) versus 2008, following three straight annual gains, including a 10.4% increase in 2008 over 2007. The decline in Attendees for the IT sector in 2009 was larger than the (8.3%) loss posted by the overall exhibition industry. Some key insights into the performance of the IT sector in 2009:  Attendees for 74% of all IT exhibitions was down for the year, and 57% of these shows reported Attendees declined more than 10%, with 43% showing declines of greater than 20%.  Attendees for 88% of computer-related events was down, and 81% of these shows reported Attendees declined more than 10%, with 63% showing declines of greater than 20%.

Total for the IT sector was driven down by CAGR losses of (4%), (2.5%) and (1.3%) in NSF, Exhibitors and Attendees, respectively, from 2000 to 2009, while Revenue was relatively flat across the period. 2008–2009: The Total for the IT sector declined (13.8%) in 2009 versus 2008 following four straight years of gains, including a 9.8% jump in 2008 over 2007. Total performance for the IT sector in 2009 was similar to the (12.5%) decline posted by the overall exhibition industry. All metrics for the IT sector posted double-digit percentage decreases in 2009 in the (13%) to (14%) range.

IT SECTOR

CEIR Index Report

2010 OUTLOOK

The growth in netbooks to a projected 40 million units in 2010 signals a continued shift to portable PCs. With few market leaders in cloud computing, many companies are expending (dedicating?) significant resources to gain market leadership, such as Salesforce.com’s Force.com, Microsoft’s Azure and Google’s App Engine. IBM, Oracle, and even Amazon are expected to compete as well in this market during 2010.

 Spending on information technology is expected to rebound in 2010.  The shift to 4G wireless networks and the move to netbooks will continue in 2010. Combined with advances in cloud computing, several large firms will compete to gain leadership on these new platforms.  Stimulus funds from the American Recovery and Reinvestment Act of 2009 (ARRA) will continue to contribute to IT growth. Despite the Great Recession and the remaining uncertainty in many markets, overall IT spending is anticipated to grow 3% to 4% during 2010. Whereas corporate spending on computer hardware, software and services dropped 5.2% in 2009, spending by businesses is expected to rise 3.3% in 2010. There are three reasons to expect this rebound: 1) businesses and consumers increasingly are demanding more mobile and flexible communications technology, 2) political and economic factors both nationally and internationally are producing IT-friendly policies, initiatives and imperatives, and 3) business can go only so long before it must update hardware and software or risk encountering problems with system and equipment failures and incompatibility with clients and vendors who have installed newer versions of various software programs. Strong growth in mobile device sales and applications and cloud computing are among trends that are heating up the competition within the IT industry and could spur it for years to come. Many mobile devices will challenge the supremacy of PCs in terms of software and solution platforms. Dramatic increases in unit sales are expected to continue for smartphones over the next two to three years, with a wider variety of products (e.g., Google’s Nexus One). Also, the massive expansion toward 4G (fourth generation) services will begin in 2010. Clearwire is the first U.S. wireless carrier of 4G networks and will expand coverage from just a few cities to a potential of 120 million customers during 2010. Likewise, AT&T and Verizon have announced expansion plans of 4G coverage to many of their customers during 2010. “While shows in the broader market have softened, our exhibition for the satellite market is in its fifth year of growth in both attendance and exhibit space. This is due to our marketing the event to new buyer groups, while also maintaining a loyal community.” – Donald Pazour, CEO, Access Intelligence LLC

In the publishing industry, newspapers and books can also expect growth from emerging communication technologies. Newspapers will increasingly experiment with Web toll booths in a pay-for-news model as they test whether the consumer is willing to pay for news. Currently, 50% of newspapers state they have plans to experiment with this model in 2010. Furthermore, Google, Microsoft, IBM and Oracle are exploring online payment systems for newspaper publishers. According to economic modeling by Datamonitor, the fiveyear horizon for the computer and computer applications industry and the telecommunications industry is one of moderate growth, less than the growth experienced during the past five years. Revenue for wireless telecommunications services, which are dominated by AT&T, Verizon Wireless, Sprint Nextel and T-Mobile, grew at a 5% compound annual growth rate (CAGR) from 2004 to 2008. Revenue is expected to grow just 0.6% in 2010 and then increase to 4%–7% annually between 2011 and 2013. The software industry, which grew at a 7% CAGR from 2004 to 2008, is expected to grow 4% in 2010 and 5% to 6% annually from 2011 to 2013. Overall, the publishing industry will continue to grow slowly. From 2004 to 2008, it grew at a 2% CAGR and is expected to grow 1.4% in 2010 and 1% to 2% annually from 2011 to 2013. Newspapers are expected to grow 1% to 1.5% annually from 2010 to 2013. However, the volume of papers is expected to decline from approximately 19.2 billion annually in 2010 to 18.5 billion in 2013. Internet carriers, dominated by AT&T, Comcast, EarthLink and Time Warner, which experienced a 6% CAGR from 2004 to 2008, are expected to grow 2.6% during 2010 and then slow to around 1.4% annual growth from 2011 to 2013. The cable TV industry, which saw revenue grow at a 3.8% CAGR from 2004 to 2008, is expected to retract 1.0% in 2010 and then rebound to grow 2% annually from 2011 to 2013.

IT SECTOR

CEIR Index Report

Stimulus funds from the American Recovery and Reinvestment Act of 2009 (ARRA) will also contribute to IT growth. For example, the majority of the $19 billion slated for health information technology, $7.2 billion for broadband and wireless Internet access, and $650 million for the purchase of computers and software in public schools will be spent in 2010. Furthermore, many of the stimulus funds will indirectly benefit IT firms. Hospitals and medical facilities are expected to use stimulus funds to upgrade data center equipment and network security products needed for transition to electronic medical records. Many new government initiatives at the federal, state and local levels are underway to digitize and utilize technological solutions. For example, many locations are using digital electronic meters. Fire stations are increasingly adopting handheld computers with databases that contain building and floor plan data that firefighters can access immediately. Rising energy costs and the political emphasis on sustainability and environmental regulation at the national and international levels favor the increased development and use of communication technology that reduces the need for travel and maximizes efficient use of energy. 2010 OUTLOOK FOR EXHIBITIONS  Consumer and business demand combined with government spending and legislation will lead to improved performance in the Communications and Information Technology sector.  The exhibition profile for this industry sector remains cloudy; however, given the certain continuing expansion of this sector, a successful formula for organizing exhibitions to serve the industry will evolve sooner or later. In 2009, the IT sector was among the worst performing sectors. Declines in the five CEIR Index metrics were between 13.1% and 14.2%. These major decreases mirror drops that ranged from 11.7% to 14.9% across the five CEIR Index metrics in 2002 following the 2001 recession. There are several reasons to anticipate improved performance for exhibitions in the IT sector for 2010. These factors generally fall into consumer and business demand and government spending and legislation.

Based upon an analysis of leading indicators, it is anticipated that consumers and businesses will increase spending on IT during 2010. This increased demand will largely be fueled by mobile computing and entertainment for consumers. Businesses are likewise expected to increase spending on mobile computing options, including cloud computing. These rapidly developing mobile computing technologies are particularly well suited to exhibitions where they can be both displayed and tested. A variety of government initiatives could provide opportunities for the exhibition industry within the IT sector. The stimulus funding is projected to provide significant funding for health information technology and new technology for schools. Furthermore, pending federal legislation for health care would further create enormous potential for health care information technology solutions. Even in the absence of legislation, efforts to curtail rising health costs will drive medical providers to seek health information technology to reduce costs and errors. Historically, the successful life of exhibitions produced to serve this sector has lasted about as long as some of the technology introduced at the events. Some mega horizontal exhibitions have experienced tremendous short-term success only to be abandoned following sharp declines. Smaller, more boutique-type events attracting specialists, the very successful formula followed by the health care industry, may be a good model for the IT sector. Companies in the IT sector are some of the largest producers of private customer events. As their portfolio of private events expands, it is likely that participation as exhibiting companies in industry exhibitions will decline. Continued business consolidation in this industry will contribute to spotty exhibition performance. “We are very bullish on live media. We see our business as a next generation digital media business, in a traditional media wrapper. Live media serves as the foundation for this strategy, and it is clear that our audiences and exhibition customers want live events as part of our marketing solutions.” – Tony Uphoff, CEO, UBM TechWeb

IT SECTOR

CEIR Index Report

Medical and Health Care (MD Sector) ECONOMIC OVERVIEW OF 2009

MD SECTOR SUB-SECTORS

 Spending on health care increased in 2009, as did the prices paid for medical services.  This sector was one of the few to see job increases in 2009.

dental 

Despite the continued economic slowdown in 2009, growth in the Consumer Price Index (CPI) for medical care outpaced growth in the overall CPI for the 12-month period ending November 2009. The CPI for medical care increased 3.5% over this period as compared with a 1.8% increase in the overall CPI. Medical care commodities, including prescription drugs, nonprescription drugs and medical supplies, increased 3.8% for the 12 months ending November 2009, while medical care services increased 3.5% over the period. The CPI for professional medical care services increased 2.6%, while the CPI for hospital and related services increased 7.1% over the period. Spending on health care increased in 2009 as well. According to the Bureau of Economic Analysis (BEA), health care spending was a seasonally adjusted $1.63 trillion during Q3 2009. This amounts to an increase from the $1.55 trillion spent on health care in 2008. Health care employment gained 2% in 2009, increasing by 267,000 jobs. In comparison, total non-farm payroll decreased 3.1% in 2009. Within health care, the number of jobs in ambulatory health care services increased from 5.7 million in December 2008 to 5.9 million in December 2009, representing a gain of 3.1%. All sub-sectors of ambulatory health care employment grew in 2009, including a 2.4% gain in physician office employees, a 2.4% increase in outpatient care center jobs, and a 7.6% rise in home health care. Employment at hospitals increased 0.8% in 2009 to 4.7 million. Employment at nursing care facilities grew as well, from 1.62 million in December 2008 to 1.64 million in December 2009, an increase of 1.2%.

industrial 

medical & health care 

nursing 

pharmaceuticals 

veterinary NSF NSF for the MD sector increased at a 3% CAGR from 2000 to 2009, far outperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (4.2%) in 2009, following a (1.2%) decrease in 2008 versus 2007. However, NSF performance for the MD sector in 2009 was far better than the (13.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the MD sector in 2009:  NSF for 59% of all MD exhibitions was down for the year, and 33% of these shows reported NSF declined more than 10%, with 10% reporting 20+% decreases.  Eighteen percent of MD events posted 10+% gains in NSF.  NSF was down for 69% of MD shows with 50,000+ net square feet of space, and 44% of these events posted 10+% declines in NSF.

MD SECTOR

CEIR Index Report

The following two graphs compare the MD sector performance to the overall exhibition industry performance for the period 2000-2009.

MD SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the MD Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. MD SECTOR – Medical and Health Care Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

108.5

8.5

112.0

3.3

117.9

5.3

136.1

15.4

134.9

-0.9

136.8

1.4

137.4

0.4

135.8

-1.2

130.0

-4.2

3.0%

Exhibitors

100.0

106.1

6.1

105.9

-0.2

112.5

6.3

118.6

5.4

123.0

3.7

123.3

0.3

123.8

0.4

129.1

4.3

121.9

-5.6

2.2%

Attendees

100.0

99.8

-0.2

106.4

6.6

109.6

3.0

111.4

1.6

115.2

3.4

117.7

2.2

119.6

1.6

119.1

-0.4

111.6

-6.3

1.2%

Revenue

100.0

103.9

3.9

109.9

5.8

111.3

1.2

117.2

5.4

118.1

0.7

127.6

8.1

125.5

-1.7

128.4

2.3

129.9

1.2

3.0%

Total

100.0

104.6

4.6

108.6

3.8

112.8

3.9

120.8

7.1

122.8

1.6

126.5

3.0

126.7

0.2

128.3

1.3

123.5

-3.7

2.4%

Exhibitors Exhibitors for the MD sector increased at a 2.2% CAGR from 2000 to 2009, well outperforming the (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector declined (5.6%) in 2009, following gains every year since 2002. Exhibitors performance for the MD sector in 2009 was better than the (11.9%) decline posted by the overall exhibition industry.

Some key insights into the performance of the MD sector in 2009:  Exhibitors for 62% of all MD exhibitions was down for the year, and 31% of these shows reported Exhibitors declined more than 10%, with 13% reporting 20+% decreases.  Eight percent of MD events posted 10+% gains in Exhibitors.  Exhibitors was down for 81% of MD shows with 50,000+ net square feet of space, and 44% of these events posted 10+% declines in Exhibitors.

MD SECTOR

CEIR Index Report

Attendees

Revenue

Attendees for the MD sector grew at a 1.2% CAGR from 2000 to 2009, outperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period.

Revenue for the MD sector increased at a CAGR of 3% from 2000 to 2009, far outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period.

In 2009, Attendees for the MD sector declined (6.3%) versus 2008, marking the second straight annual decline. Prior to 2008, Attendees for the MD sector had not posted an annual decrease since 2001. The decline in Attendees for the MD sector in 2009 was similar to the (8.3%) loss posted by the overall exhibition industry.

Revenue for the MD sector gained 1.2% in 2009 following a 2.3% increase in 2008 versus 2007. Revenue for the MD sector has increased every year since the Index was started in 2000, except for posting a (1.7%) annual decline in 2007. Revenue performance for the MD sector in 2009 was significantly better than the (15.8%) decline posted by the overall exhibition industry.

Some key insights into the performance of the MD sector in 2009:  Attendees for 66% of all MD exhibitions was down for the year, and 46% of these shows reported Attendees declined more than 10%, with 11% reporting 20+% decreases.  Nine percent of MD events posted 10+% gains in Attendees.  Attendees was down for 69% of MD shows with 50,000+ net square feet of space, and 56% of these events posted 10+% declines in Attendees. “Medical meetings have remained fairly strong in spite of the economic downturn over the past two years. Professional registrants remain enthusiastic, and the need for education and training remains strong. Medical device manufacturers have been faced with two major challenges: the economy; and uncertainty of health care reform. We remain hopeful that some form of stability will follow the completion of the new health care reform bill, especially as the economy continues to recover.” – Steve Drew, Assistant Executive Director: Scientific Assembly and Informatics, Radiological Society of North America (RSNA)

Some key insights into the performance of the MD sector in 2009:  Revenue for 50% of all MD exhibitions was up for the year, and 25% of these shows reported Revenue rose more than 10%.  Of the 50% of MD shows that reported Revenue losses, 25% of them had Revenue declines of greater than 10%, and 10% had Revenue decreases of more than 20%.  Revenue was down for 67% of MD shows with 50,000+ net square feet of space, and 50% of these events posted 10+% declines in Revenue. Total 2000–2009: The Total for the MD sector increased at a CAGR of 2.4% from 2000 to 2009, far outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. All four industry metrics increased on a CAGR basis from 2000 to 2009, led by 3% gains in NSF and Revenue. 2008–2009: The Total for the MD sector declined (3.7%) in 2009 versus 2008, following gains in every year since the Index was started in 2000. Total performance for the MD sector in 2009 was far better than the (12.5%) decline posted by the overall exhibition industry. Three of the four industry metrics decreased in 2009 for the MD sector, led by a (6.3%) decline in Attendees. However, Revenue gained for the year, posting a 1.2% increase.

MD SECTOR

CEIR Index Report

2010 OUTLOOK  The Medical and Health Care sector is expected to grow 3.9% in 2010.  The health care reform bill will have a significant positive effect on this sector.  Increases in public health care spending are expected to be greater than increases in private health care spending. The Medical and Health Care sector has historically grown faster than the rest of the U.S. economy, and it is now the largest economic sector in the nation. Gross Domestic Product (GDP) is forecast to grow 2.4% in 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, moving from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. However, unemployment is expected to rise in 2010 to around 10% before falling again in 2011. It is expected that the Medical and Health Care sector will grow 3.9% in 2010. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures, and sector data. These findings are consistent with those from other forecasts related to this sector. “It seems that we have weathered the worst of this recession and that 2010 will see solid attendee growth in most medical and healthcare sectors over 2009 levels. This should lead to growth in space sales and number of exhibitors in 2011. Even more importantly, however, is that once again, through the toughest of times, the face-to-face event business has proven its resilience and remains a vital part of the overall marketing mix.” – Joel A. Davis, Founder & CEO, JD Events Health care employment has continued to grow, despite losses in jobs elsewhere in the economy. Based upon analysis of leading economic indicators, spending on health care will continue to grow in 2010, but at a slower rate than in previous years. Still, the sector will be one of the fastest-growing areas in the economy. Toward the end of 2009, the U.S. Senate passed an $871 billion health care reform bill. The bill must still be merged with a $1 trillion plan approved by the House of Representatives and pass through a few additional procedural steps to become law. Further, the Obama administration’s economic stimulus package contained

many provisions for health care spending, including expansion of Medicaid, improvement of health care information technology, and additional financing for research grants. A significant percentage of these funds will be distributed in 2010, positively impacting the growth rate of the health care industry in 2010 and beyond. According to usgovernmentspending.com, total U.S. government health care spending (federal, state and local) for 2010 is projected to be $1.1 billion. The Center for Medicare and Medicaid Services (CMS) projects total U.S. health care expenditures (public and private) of $2.6 trillion in 2010, comprising 17.7% of GDP, with annual projected growth of 4.6%, down slightly from 5.5% growth in 2009. The growth rate decline for the health care sector is primarily due to a 21% reduction in Medicare physician payment rates, as required by the Sustainable Growth Rate (SGR) formula as part of the current law. This cut in payment rates is projected to reduce Medicare spending on physician and clinical services by 7% in 2010 and slow total Medicare spending growth to 2.5% in 2010. Spending on hospitals by Medicare is projected to grow 4.6% in 2010, down from a 6.8% growth rate in 2009, as managed care payment rates for hospital services are reduced because of the rate cut. Spending on private health care is projected to grow 4.2% in 2010, while spending on public health care is forecast to increase 5% for the year. Private health care expenditures are expected to reach $1.37 trillion, while public health care spending is forecast to generate $1.25 trillion. Public spending is expected to grow faster than private spending on health care because: (1) the recession has restricted households’ ability to spend on health care, (2) Medicaid enrollment and expenditures have risen, and (3) the first wave of the baby boomer generation has become eligible for Medicare. In 2010, improving economic conditions are expected to be drivers of growth in the use of medical services (1.1%), spending on private insurance benefits (4.0%), and outof-pocket spending on health care (2.8%). Expenditures on private insurance are expected to reach $892 billion in 2010, and out-of-pocket spending on health care is expected to reach $291 billion for the year. Spending on prescription drugs is forecast to rise 4.5% to $256 billion in 2010 as use increases in response to projected improving economic conditions.

In 2010, improving economic conditions are expected to be drivers of growth in the use of medical services … MD SECTOR

CEIR Index Report

Spending on hospitals is expected to grow 5.1% in 2010, down from 2009 levels, primarily due to an expected slowdown in public-payer hospital spending growth, from 6.9% in 2009 to 5.5% in 2010. This slowdown is based on the scheduled reduction of Medicare physician payment rates. If this cut is overturned by Congress, then growth rates will be higher in this sub-sector. Hospital spending is expected to total $830 billion in 2010. Spending growth on physician and clinical services is expected to reach an historic low of 2.3% in 2010, although total expenditures for this category are projected to be $552 billion. 2010 OUTLOOK FOR EXHIBITIONS  Exhibition opportunities for the MD sector will exist for innovative medical devices, customized care, holistic and preventive treatments, and elective medical procedures.  The unknowns of health care reform leave exhibition industry performance a bit cloudy heading into 2010. The most important issue that may affect the exhibition industry in 2010 is the restructuring of the nation’s health care system. The legislative bills in Congress are touted by Democrats as a solution to fraud, waste and increasing costs, while Republicans see them as an unnecessary expansion of government, expenses and taxes. At this time of writing, the House and Senate are working to reconcile this bill. On February 22, 2010, President Obama unveiled his own proposal largely using the Senate version as a template. It addresses some main concerns of House leaders who are demanding more help for the middle class, but contained no new major concessions to Republicans.

The overall picture for the MD sector is unclear … The Medical and Health Care sector has grown significantly in the U.S., driven by an aging population, soaring costs, and the emergence of specialized medical care and markets. The industry is expected to continue growing in the coming years, and medical and health care exhibitions are projected to continue growing and producing revenue as well, outpacing all other sectors. Exhibitions for this sector continue to serve a very important purpose of providing opportunities for medical professionals to learn about new medical devices, technologies, treatments, medicines, care, and other key trends in the industry. In addition, exhibitions will remain an important venue for training, education and certification. If the health care bill passes, exhibitions could gain even more importance as a source of industry and consumer information within a standardized system. Conversely, there is a chance that nationalized health care will reduce competition, where exhibition participation for exhibitors changes from a “must” to a “maybe.” The overall picture for the MD sector is unclear, given the legislation that is passing through Congress and the unknowns about the continued aging of our society. For example, an aging baby boomer population will pose significant problems for Medicare and Medicaid programs. These challenges are compounded by the fact that a significant number of boomers will be lower income or indigent. Costs increases will continue, placing significant pressures on an already fragile system. In the short term, however, exhibition opportunities will continue to exist in the areas of education and certification, innovative medical devices, customized care, holistic and preventive treatments, and elective medical procedures.

… opportunities will continue to exist in the areas of education and certification, innovative medical devices, customized care, holistic and preventive treatments, and elective medical procedures.

MD SECTOR

CEIR Index Report

Raw Materials and Science (RM Sector) ECONOMIC OVERVIEW OF 2009  Leading economic indicators show a mixed performance for this sector over the past year. However, most indices improved over the second half of 2009.  Demand for raw materials will increase as world economies improve.  Continued economic expansion in China will have a significant impact on this sector. Historically, raw materials prices have been relatively stable and at relatively low levels. Beginning in the 1990s, however, increased demand sparked dramatic price increases primarily due to the growing global economy, especially in emerging markets such as China and India. This growth led to business expansion and increases in employment. The global recession, which has impacted all economies including emerging markets, has led to wide fluctuations in employment and raw material prices over the past year. Q3 2009 mining sales decreased $22.4 billion from Q3 2008 levels, according to the latest mining data released by the U.S. Census Bureau. The Quarterly Financial Report for Manufacturing, Mining, and Trade showed that sales during Q3 2009 were $45 billion, representing a $2 billion increase over Q2 2009. Recent data from Reuters-CRB Continuous Commodity Index (CCI), which measures broad trends in overall commodities prices, is positive, as the CCI Index was 504.1 on January 8, 2010, versus 370.4 a year ago, representing a 36.1% increase. Over the same period, metals increased 107.5%; textiles, 19.9%; raw materials, 48.2%; foodstuffs, 18.0%; fats and oils, 22.3%; and livestock, 27.5%. Strong year-over-year gains in CCI were seen through July 2008, but by December, the CCI had declined (23.7%) for the year. This decline continued through the first half of 2009; however, since August, the Index had steadily increased to January’s level. In 2008, there was an 8.5% increase in natural resources and mining jobs, but 2009 saw a reduction in these jobs. In December 2009, there were 703,000 employed in mining and logging, down 10.9% for the year. There was a 9.6% decline in coal mining jobs and a 1.9% reduction in oil and gas extraction jobs.

RM SECTOR SUB-SECTORS agriculture & farming 

ceramics & glass 

chemical 

energy 

floriculture & horticulture 

forest products 

mining 

ocean science & equipment 

paint 

paper 

petroleum, oil & gas 

plastics 

pollution control 

science 

textiles 

water 

wire RM SECTOR

CEIR Index Report

The following two graphs compare the RM sector performance to the overall exhibition industry performance for the period 2000-2009.

RM SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the RM Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. RM SECTOR â&#x20AC;&#x201C; Raw Materials and Science Metric

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

93.4

-6.6

91.3

-2.2

98.9

8.3

100.8

1.9 107.5

6.7

117.3

9.1

122.5

4.5

126.4

3.2

117.2

-7.3

1.8%

Exhibitors

100.0

99.8

-0.2

98.4

-1.4

97.6

-0.7

99.1

1.5

98.1

-1.0

96.4

-1.7

97.2

0.8

100.5

3.4

91.7

-8.7

-1.0%

Attendees

100.0

100.8

0.8

98.1

-2.7

99.6

1.6

96.1

-3.5 104.4

8.6

131.4

25.9

136.6

4.0

140.0

2.4

131.4

-6.1

3.1%

Revenue

100.0

97.7

-2.3 100.4

2.8

94.3

-6.0

91.7

-2.8

99.6

8.6

106.2

6.6

124.6

117.3 130.5

4.7

124.8

-4.3

2.5%

Total

100.0

97.9

-2.1

-0.9

97.6

0.6

96.9

-0.7 102.4

5.6

112.6

10.0

120.1

3.4

116.0

-6.6

1.7%

97.0

Employment decreased for many of the remaining raw materials and science sectors, including a 14,500 decline for textile workers in 2009, representing a loss of 10.6%. Textile product mills also saw a reduction in employment by 17,500 jobs, or 12.4% of the workforce. For the paper, chemical and plastics industries, employment decreased 8.2%, 4.2% and 9.4% respectively. Overall, 136,500 jobs were lost in these three industries in 2009.

6.6

124.2

NSF NSF for the RM sector increased at a 1.8% CAGR from 2000 to 2009, outperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (7.3%) in 2009, following increases every year since 2002. NSF performance for the RM sector in 2009 was better than the (13.9%) decline posted by the overall exhibition industry.

RM SECTOR

CEIR Index Report

Some key insights into the performance of the RM sector in 2009:  NSF for 71% of all RM exhibitions was down for the year, and 47% of these shows reported NSF declined more than 10%, with 29% reporting decreases of 20+%.  NSF for 71% of agriculture events was down, and 29% of these shows reported NSF declined more than 10%, with none reporting decreases of 20+%.  NSF for 50% of energy-focused shows was down, and 50% of these shows reported NSF declined more than 10%, with 25% reporting decreases of 20+%. Exhibitors Exhibitors for the RM sector declined at a (1%) CAGR from 2000 to 2009, on par with the (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry. Exhibitors for the sector declined (8.7%) in 2009, following two consecutive years of gains, including a 3.4% increase in 2008 versus 2007. Exhibitors performance for the RM sector in 2009 was slightly better than the (11.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the RM sector in 2009:  Exhibitors for 82% of all RM exhibitions was down for the year, and 35% of these shows reported Exhibitors declined more than 10%, with 24% reporting decreases of 20+%.  Exhibitors for 100% of agriculture events was down, and 29% of these shows reported Exhibitors declined more than 10%, with none reporting decreases of 20+%.  Exhibitors for 75% of energy-focused shows was down, and 50% of these shows reported Exhibitors declined more than 10%, with 25% reporting decreases of 20+%.

Attendees Attendees for the RM sector grew at a 3.1% CAGR from 2000 to 2009, well outperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the RM sector declined (6.1%) versus 2008, marking the first annual decline since a (3.5%) decrease in 2004. The decline in Attendees for the RM sector in 2009 was better than the (8.3%) loss posted by the overall exhibition industry. Some key insights into the performance of the RM sector in 2009:  Attendees for 56% of all RM exhibitions was up for the year, but 31% of these shows reported Attendees declined more than 10%, with 19% reporting decreases of 20+%.  Attendees for 67% of agriculture events was up.  Attendees for 50% of energy-focused shows was down, but none of these shows reported Attendees declined more than 10%. Revenue Revenue for the RM sector increased at a CAGR of 2.5% from 2000 to 2009, far outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the RM sector declined (4.3%) in 2009, following increases each year since a (2.8%) decrease in 2004. Revenue performance for the RM sector in 2009 was significantly better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the RM sector in 2009:  Revenue for 55% of all RM exhibitions was up for the year, but 35% of these shows reported Revenue declined more than 10%.

RM SECTOR

CEIR Index Report

Total 2000–2009: The Total for the RM sector increased at a CAGR of 1.7% from 2000 to 2009, outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. Growth in Total for the RM sector was driven by CAGR gains of 3.1%, 2.5%, and 1.8% in Attendees, Revenue, and NSF respectively from 2000 to 2009. 2008–2009: The Total for the RM sector declined (6.6%) in 2009 versus 2008, following gains each year since 2004, when the sector posted a (0.7%) loss. Total performance for the RM sector in 2009 was better than the (12.5%) decline posted by the overall exhibition industry. All metrics for the RM sector posted decreases in 2009, led by an (8.7%) decline in Exhibitors. 2010 OUTLOOK  It is expected that the Raw Materials and Science sector will grow 4.9% during 2010.  The global demand for raw materials should continue to increase as the Chinese economy is forecast to grow 9.5% in 2010.  As the global economic recovery continues through 2010, it is expected that energy prices will increase as well. Assuming that the U.S. GDP grows at 2.4% as forecast, crude oil prices are expected to increase 8.5%. The Raw Materials and Science sector is a leading indicator of manufacturing demand and innovation for the greater U.S. economy. Overall, U.S. Gross Domestic Product (GDP) is forecast to grow 2.4% in 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, going from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. In 2010, unemployment is expected to rise to about 10% before improving in 2011. There is a global market for raw materials, with Chinese demand an important consideration. The Chinese economy is forecast to grow 9.5% during 2010, according to the Chinese State Council’s Development Research Center.

As the global economy rebounds, demand for raw materials and other input commodities is expected to climb as well. The Raw Materials and Science sector is forecast to grow 4.9% in 2010. This measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures and sector data. These findings are consistent with those from other forecasts related to this sector. It is expected that the metals sub-sector will experience 6.8% growth, followed by raw materials, 4.2%; fats and oils, 4.2%; food stuffs, 3.4%; livestock, 2.9%; and textiles, 0.9%. Gold and other precious metals reached record highs in 2008 and continued to maintain their value through 2009. It is expected that this trend will continue in 2010, as it is unlikely there will be steep contractions in monetary or fiscal policies, leading investors to hedge against inflation by turning to real assets. Further, it is anticipated that silver will reach new highs in 2010. Silver is used in many industries such as medicine, photography and energy and, thus, has greater potential to benefit from a recovering economy. Also, as the price of gold continues to be volatile, silver may become the favored store of value for many investors. Wheat and soybean prices are predicted to remain flat in 2010, due primarily to excess supply. Strong soybean prices in 2009 helped stimulate additional acreage in South America; thus, the potential increase in supply for 2010 will likely prevent any increases in soybean prices. Sugar prices increased in 2009 due to tight supply, and supplies are expected to remain low through the first half of 2010. Corn is expected to perform well in 2010 due to its dual use as a biofuel and foodstuff. As the world continues to aim at curbing carbon emissions, ethanol production is expected to continue its increase through 2010. As the global economic recovery continues through 2010, it is expected that energy prices will increase. Assuming that the U.S. GDP grows at 2.4% as forecast, crude oil prices are expected to increase 8.5%, with many potential shocks to come. This rise corresponds to a 5.6% increase in average gasoline prices, according to the U.S. Energy Information Administration. Because oil is priced in dollars, if there is higher than expected inflation, oil prices may rise higher than predicted.

RM SECTOR

CEIR Index Report

Electricity prices reflect trends in natural gas prices, which are expected to remain low in 2010 due to excess supply. Therefore, real average delivered electricity prices are expected to remain below nine cents per kilowatt-hour through 2010, according to the U.S. Energy Department. Demand for solar and other forms of alternative renewable energy is expected to continue to grow through the foreseeable future. First Solar, a leading solar energy company, predicts global demand for solar energy will increase 45% in 2010 to reach approximately 7.5 gigawatts and will continue at a compound annual growth rate of 35% through 2012. Toward the end of 2009, the world’s nations met at the 2009 United Nations Climate Change Conference (commonly known as the Copenhagen Summit) and agreed in principle to keep any temperature increases below two degrees Celsius. As the world continues to grapple with global climate change, additional legislation, both locally and internationally, could be aimed at curbing greenhouse gases beyond 2010. The expected demand for alternative energy in the future will affect research and development, as well as production, during 2010. 2010 OUTLOOK FOR EXHIBITIONS  The Great Recession impacted exhibitions in this sector in 2009.  The sector has been resilient and should rebound as the market dynamics improve along with the overall economy.  This sector is ripe for expansion as investment in renewable and more environmentally friendly energy resources increases. According to the CEIR Exhibition Industry Census, there are 810 business-to-business exhibitions in the Raw Materials and Science sector, representing 8.1% of the exhibition universe. The Great Recession impacted this sector in 2009, as declines were evident across all five key metrics reported in the CEIR Index. This sector felt the fall-out of the collapse of the global commodities market in September/October 2008. However, the sector appeared to be rebounding in the second half of 2009. It will be helpful to review the next Quarterly Financial Report for Manufacturing, Mining, and Trade for changes in sales during the fourth quarter of 2009. The sales trends during the quarter should be reflected in the sector’s exhibition industry metrics in 2010.

Historical information provided in the CEIR Index can help to provide a forecast of the Great Recession’s impact on this sector. Following the most recent recession, from March 2001 to November 2001, the data shows that most of the performance measures declined in 2002 as compared to 2001. However, the declines in this sector were not steep, as the Total for the RM sector decreased 0.9% in 2002, NSF fell 2.2%, Exhibitors declined 1.4% and Attendance fell 2.7%, while Revenue increased 2.8% for the year. Over the current period, the decreases were much more pronounced than in 2002, as the Total declined 6.6%, NSF fell 7.3%, Exhibitors decreased 8.7%, Attendance declined 6.1% and Revenue fell 4.3%. However, this sector’s results were approximately 50% better than the results of the entire industry. The American Recovery and Reconciliation Act of 2009 (ARRA) should continue to provide financial stimulus for this sector, as $80.9 billion of the act’s capital investment has been allocated for infrastructure improvement projects. Of this amount, $45.2 billion is allocated for roads, bridges and railways, and $8.9 billion for scientific research. Scientific research grants have been available from organizations such as the National Science Foundation, the U.S. Department of Energy, NASA, NOAA, the National Institute of Standards and Technology, and the U.S. Geological Survey. Of the funding made available through ARRA, approximately 25% had been allocated as of February 2010. This sector will be helped as additional resources are allocated over the remainder of 2010. Also, ARRA provided $49.7 billion for the development and use of greener energy technologies, of which approximately 75% of these funds remain unallocated. As scientists and engineers continue to focus on developing alternative fuels that are competitively priced and offer similar energy output to oil, this sector will remain vibrant. However, the threat of massive investment in alternative energy will motivate oil- and gas-producing countries to keep production levels high to keep prices down. Concern for global warming and other environmental issues combined with increased investment in renewable energy sources including wind, wave force and solar, provide opportunities for establishing new conferences and exhibitions to advance these unique sciences.

RM SECTOR

CEIR Index Report

Transportation (TX Sector) ECONOMIC OVERVIEW OF 2009  Declines in the Transportation sector may have reached bottom in 2009.  Performance across the sector was mixed for the year, with trucking adding approximately $110 billion in value and remaining the largest subsector of the TX sector.  The Consumer Price Index (CPI) for Transportation Services increased 3.6% for the 12 months ending November 2009. Rising fuel prices led to increases in the CPI. The Transportation sector is one of the largest sectors in the economy, comprising approximately 10% of annual private-sector U.S. Gross Domestic Product. Globalization has continued to increase passenger transportation, while substantial growth in e-commerce has fueled larger volumes in cargo distribution worldwide. Transportation services saw a declining level of loss each quarter of 2009 as compared with the same quarters the previous year. For example, Q1 2009 was down 6.7% compared with Q1 2008. The second and third quarters of 2009 were down 4.8% and 2.6% respectively, versus Q2 and Q3 2008. The all-time high in this sub-sector was the second quarter of 2007, and transportation services were off approximately 9% from that level. The trucking sub-sector continues to be the largest segment within the Transportation sector, with approximately $110 billion in value added during 2009, according to the U.S. Bureau of Economic Analysis. Over the past decade, the trucking industry has grown about 20%. By comparison, air transportation revenue has more than doubled over the last decade and generated approximately $90 billion in value added during 2009. Rail and water transportation revenue have been relatively flat over the past decade. In terms of overall gross output, trucking is still the largest sub-sector within the Transportation sector at about $275 billion in revenue, with air transportation generating approximately $150 billion. “The Automotive Industry has experienced a (48%) decline in expo space sales and a (37%) decrease in attendance, during the past 18 months. We view our February 2010 convention as a turning point in regards to attendance, but the exhibition continues to lag and probably will for another year or two.” – Stephen Pitt, Vice President Conventions & Exhibitions, National Automobile Dealers Association (NADA)

TX SECTOR SUB-SECTORS aerospace & aviation 

automotive & trucking 

physical distribution 

railroads 

transportation Operating margins for U.S.-based passenger airlines improved during Q3 2009 compared with the same quarter of 2008, mostly driven by a 36% increase in ancillary fees collected, which reached $2 billion. These fees include reservation change fees and extra baggage fees. Operating margins increased from -4.1% to 2.2% over the same period. Similarly, the number of passengers increased in September 2009 compared with September 2008, rising by 500,000, or 0.8%. This increase reversed a steady trend of declining passenger traffic for the first eight months of 2009 compared with 2008. Freight shipments were down 5.8% during 2009 through October and reached bottom in May, their lowest point since June 1997. June through August 2009 saw increases in freight shipments (seasonally adjusted and measured in ton-miles), followed again by declines in September and October, according to the U.S. Department of Transportation. This sub-sector is recovering inconsistently compared with other sub-sectors within the transportation industry. Employment in the various segments of the transportation industry over the past two decades has grown only for trucking, local transit and courier services and has declined for air and rail transportation. For example, passenger airline employment dropped 3.7% from October 2008 to October 2009, marking the 16th consecutive decrease in employment when compared with year-overyear monthly employment data. Regional airlines saw the largest drop, with employment falling more than 10% over the period.

TX SECTOR

CEIR Index Report

The following two graphs compare the TX sector performance to the overall exhibition industry performance for the period 2000-2009.

TX SECTOR

CEIR Index Report

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

CAGR

NSF

100.0

99.7

-0.3

96.4

-3.2

102.7

6.5

109.7

6.9

119.0 8.5

123.5

3.8

123.8

0.3

121.3

-2.0

104.4

-13.9

0.5%

Exhibitors

100.0

98.0

-2.0

92.7

-5.5

97.9

5.7

103.5

5.7

108.3 4.6

109.6

1.3

110.7

0.9

107.8

-2.6

95.0

Attendees

100.0

97.8

-2.2

97.8

0.0

97.3

-0.5

103.9

6.7

105.0 1.1

109.8

4.6

115.2

4.9

110.5

-4.0

101.4

-8.3

0.2%

Revenue

100.0

100.1

0.1

97.3

-2.8

95.3

-2.0

97.2

1.9

106.1 9.2

116.3

9.7

124.2

6.8

119.9

-3.5

100.9

-15.8

0.1%

Total

100.0

98.9

-1.1

96.0

-2.9

98.3

2.4

103.5

5.3

109.6 5.8

114.9

4.8

118.6

3.2

114.9

-3.1

100.6

-12.5

0.1%

-11.9 -0.6%

The following table shows the CEIR Index metrics for the TX Sector from 2000 to 2009, with year-over-year percentage change and CAGR from 2000 to 2009. TX SECTOR – Transportation Metric

2000

2001

2002

2003

2006

2007

2008

2009

CAGR

NSF

100.0

106.5

6.5 108.5

1.9

111.0

2.3 107.2

-3.5 119.4

11.5

131.9

10.4

138.0

4.7

131.7

-4.6

110.5

-16.1

1.1%

Exhibitors

100.0

92.5

-7.5

94.4

2.1

104.1

111.1

6.7 112.4

1.2

126.9

12.9

130.1

2.6

128.1

-1.5

117.2

-8.6

1.8%

Attendees

100.0

110.6

10.6 111.3

0.6

119.1

7.1 127.3

6.9 119.4

-6.3

124.0

3.9

128.8

3.8

115.4

-10.4 134.0

16.1

3.3%

Revenue

100.0

106.9

6.9 111.0

3.9

117.0

5.4 122.2

4.5 132.9

8.7

146.9

10.5

167.3

13.9

155.6

-7.0

133.3

-14.3

3.2%

Total

100.0

104.1

4.1 106.3

2.1

112.8

6.1 117.0

3.7 121.0

3.5

132.5

9.4

140.7

6.2

132.4

-5.9

124.9

-5.7

2.5%

10.3

2004

Employment in the transportation industry saw little change over the last few months of 2009, according to the U.S. Bureau of Labor Statistics, with a decline of about 5,000 employees from October 2009 to November 2009 in a sector with over four million employees. From November 2008 to November 2009, however, the unemployment rate for the transportation industry increased from 5.8% to 8.5%. The largest decline over this period was in air transportation. However, earnings by employees (whether measured hourly or weekly) were up 2.5% from November 2008 to November 2009. This “wage-stickiness,” as termed by labor economists, has been a hallmark of U.S. labor markets since the Great Depression. Historically, wages have not declined when unemployment rises, unlike the prices for other goods and services.

2005

The CPI for Transportation Services (for urban consumers) rose 3.6% for the 12 months ending November 2009. The largest price increases were seen for fuel, which rose 6.2% over the period. The Recreation Vehicle Industry Association saw a 23% increase in shipments from October 2008 to October 2009. However, this rise was coming off a 30% decline in 2008, so the recovery did not bring industry performance back to where it was in the mid-2000s. The credit crunch, increases in personal savings, the cost of fuel and the cost of recreational vehicles have made this category very volatile and sensitive to changes in the economy.

TX SECTOR

CEIR Index Report

NSF NSF for the TX sector increased at a 1.1% CAGR from 2000 to 2009, outperforming NSF for the overall exhibition industry, which increased at a CAGR of 0.5% over the period. NSF for the sector declined (16.1%) in 2009, following a decrease of (4.6%) in 2008 versus 2007. NSF performance for the TX sector in 2009 was on par with a (13.9%) decline posted by the overall exhibition industry. Some key insights into the performance of the TX sector in 2009:  NSF was down for 72% of all TX exhibitions, and 50% of these shows reported NSF declined more than 20%.  NSF was up for 36% of automotive/cycle events.  NSF was down for 100% of aviation shows.  NSF was up for 33% of shows with more than 50,000 net square feet of space.  NSF was up for 44% of Q1 events.  NSF was down more than 20% for 86% of Q4 exhibitions. Exhibitors

 Exhibitors was up for 33% of shows with more than 50,000 net square feet of space.  Exhibitors was up for 44% of Q1 events.  Exhibitors was down for 86% of Q4 exhibitions, but only 14% of these reported declines in Exhibitors of more than 10%. Attendees Attendees for the TX sector grew at a 3.3% CAGR from 2000 to 2009, far outperforming Attendees for the overall exhibition industry, which increased at a CAGR of 0.2% across the period. In 2009, Attendees for the TX sector increased a whopping 16.1% versus 2008, following a (10.4%) decline in Attendees in 2008 over 2007. The increase in Attendees for the TX sector in 2009 was significantly better than the (8.3%) loss posted by the overall exhibition industry. Additionally, this metric reported the largest percentage gain in 2009 of all metrics across all sectors for the Index. Some key insights into the performance of the TX sector in 2009:  Attendees was up for 67% of all TX exhibitions.  Attendees was up for 89% of automotive/cycle events.

Exhibitors for the TX sector increased at a 1.8% CAGR from 2000 to 2009, well outperforming the (0.6%) CAGR decrease in Exhibitors for the overall exhibition industry.

 Attendees was down for 100% of aviation shows.

Exhibitors for the sector declined (8.6%) in 2009, following a (1.5%) decrease in 2008 versus 2007. Prior to that, Exhibitors had increased each year since 2001. Exhibitors performance for the TX sector in 2009 was slightly better than the (11.9%) decline posted by the overall exhibition industry.

 Attendees was up for 75% of Q1 events.

 Attendees was up for 64% of shows with more than 50,000 net square feet of space.

 Attendees was up for 57% of Q4 exhibitions.

Some key insights into the performance of the TX sector in 2009:  Exhibitors was down for 72% of all TX exhibitions, and 44% of these shows reported Exhibitors declined more than 10%.  Exhibitors was up for 45% of automotive/cycle events.  Exhibitors was down for 100% of aviation shows.

TX SECTOR

CEIR Index Report

Revenue Revenue for the TX sector increased at a CAGR of 3.2% from 2000 to 2009, far outperforming Revenue for the overall exhibition industry, which remained relatively flat over the 10-year period. Revenue for the TX sector declined (14.3%) in 2009, following a (7%) decrease in 2008 versus 2007. Prior to that, Revenue for the TX sector had increased each year since the Index started in 2000. Revenue performance for the TX sector in 2009 was slightly better than the (15.8%) decline posted by the overall exhibition industry. Some key insights into the performance of the TX sector in 2009:  Revenue was down for 82% of all TX exhibitions.  Revenue was down for 90% of automotive/cycle events.  Revenue was down for 80% of shows with more than 50,000 net square feet of space.  Revenue was down for 67% of Q1 events. Total 2000–2009: The Total for the TX sector increased at a CAGR of 2.5% from 2000 to 2009, far outperforming the overall exhibition industry, which remained relatively flat over the 10-year period. The TX sector is one of the top performing sectors since the Index started in 2000. Growth in Total for the TX sector was driven by CAGR gains in all metrics from 2000 to 2009, led by 3.3% and 3.2% increases in Attendees and Revenue respectively. 2008–2009: The Total for the TX sector declined (5.7%) in 2009 versus 2008, following a (5.9%) decrease in 2008 over 2007. Before that, the TX sector had gained every year since the start of the Index. Total performance for the TX sector in 2009 was significantly better than the (12.5%) decline posted by the overall exhibition industry. In 2009, two industry metrics posted double-digit percentage decreases (NSF and Revenue), but Attendees reported a 16.1% gain.

2010 OUTLOOK  The Transportation sector is expected to grow 2.7% in 2010.  Increases in fuel prices will lead to losses for the airline industry, while the commercial trucking sector should begin to improve. The Transportation sector is heavily tied to the greater U.S. economy. U.S. GDP is forecast to grow 2.4% during 2010, according to the Federal Reserve Bank of Philadelphia. Each quarter is expected to see increased growth, rising from 2.3% in Q1 to 2.9% in Q4 on an annualized basis. However, unemployment is expected to rise in 2010 to about 10% before falling again the following year. The Transportation sector is expected to grow 2.7% in 2010, as a measure of growth for the sector’s portion of GDP. The measure is calculated based on weighted regressions using historical GDP, consumer, producer, government expenditures, and transportation sector data. These findings are consistent with other forecasts related to this sector. Leading economic indicators show that growth in passenger transportation will outpace growth in cargo and freight in the U.S. in 2010. Manufacturing is expected to grow at a more rapid pace in developing countries as compared to the U.S. However, all sectors of the transportation industry are expected to grow during 2010. Despite a slow economic rebound in 2010, the international airline industry is still expected to lose $5.6 billion, according to the International Air Transport Association. This is actually an improvement over 2009, which saw over $10 billion in losses. North America should account for $2.0 billion of the total industry’s losses in 2010. Operating profits are expected to turn positive in 2010 and reach $4.0 billion, with North American airlines showing an operating profit of $1.2 billion. Airline passenger demand is expected to grow 4.5% globally, and fuel prices are expected to rise another 20%, as they did in 2009. Airline fares are expected to remain about 12% below their pre-recession levels. The combination of these factors will result in continued losses for airlines in 2010, but the losses are not anticipated to be as deep as they were in 2009.

TX SECTOR

CEIR Index Report

Commercial trucking is expected to rise in 2010, as many indices bottomed out in late 2009. New truck orders were up during the summer, with the American Trucking Association’s tonnage index showing improvement. Freight volumes are expected to grow during 2010, perhaps 2% to 3%, but with most of the growth at the end of the year. The Recreation Vehicle Industry Association expects shipments to rise by about 27% during 2010, signaling a significant turnaround from 2008 and a continuation of growth that began during 2009. However, credit restrictions and high unemployment will continue to hinder purchases. 2010 OUTLOOK FOR EXHIBITIONS  The Transportation sector benefits from globalization and a number of emerging markets.  This sector is challenged by high fuel costs and aging infrastructure.  The automotive industry, especially the automotive aftermarket, will be responsive to consumer trends and new technologies, resulting in opportunities for a variety of events directed at cars and trucks. Globalization will continue to drive the Transportation sector, as a large percentage of the world is classified as being an “emerging market,” the largest of which is the Pacific Rim region. Domestically, trucking is still the largest sub-sector in terms of overall gross output; however, this position will be seriously challenged in the coming years if a significant national infrastructure development program is passed that may alter the shipping and cargo landscape. However, due to the urgency placed on overhauling the health care and Social Security programs, such an infrastructure program is unlikely. A more likely scenario is that infrastructure redevelopment will be applied unevenly across the states.

Higher airline fares never materialized during the 2009 spike in prices. However, with fuel prices at 18-month highs and uncertainty continuing in the Middle East, future price shocks to the airline industry are likely. Leading economists seem to agree that a General Motors-type bailout for the major airlines is highly unlikely if a major carrier collapses. Overall, inbound travel receipts to the U.S. may also decline as the country struggles to tap new international markets (e.g., China) while preventing losses in more traditional international markets (e.g., Japan), as competition in regional markets increases for air travel. Specialized markets, such as the RV market, face a number of unknown factors, including high fuel prices and declining retirement portfolios of prospective buyers, which may slow this segment’s predicted growth. Lack of coordinated efforts to develop new markets and implement much needed refurbished infrastructures could pose serious problems for the exhibition industry in the years to come. In addition, a rising issue to watch is international exhibitors and attendees who continue to be challenged by visa issues. Although the jobless recovery may continue due to historically low interest rates, rising gas prices may end discretionary consumer spending, especially in regards to business travel and to some exhibitions. However, as the automotive industry is forced to change, it will embrace new models and technologies and, as a result, it will create a number of opportunities for car shows and automotive exhibitions.

TX SECTOR

CEIR Index Report

2009 CEIR Index Participants AAOS Annual Meeting ABC Kids Expo ABPA Annual Convention ACI Fall Convention ACI Spring Convention ACME Annual Meeting ADA Annual Session AEJMC Convention AGD Annual Meeting & Exhibits AHRMM Annual Conference & Exhibition Alberta Gift Show (Spring) All Candy Expo American College of Cardiology Annual Scientific Session Exposition American College of Medical Genetics (ACMG) – Annual Clinical Genetics Meeting American Diabetes Association Scientific Sessions American International Toy Fair America’s Food and Beverage AMI International Meat Poultry & Seafood Expo Annual Clinical Congress (ACS) Annual National RV Trade Show AORN Annual Congress AOTA Annual Conference and Expo AS3 ASCO Annual Meeting ASD/AMD Gift Las Vegas ASD/AMD Jewelry Las Vegas ASD/AMD Las Vegas - Summer ASD/AMD Las Vegas - Winter ASD/AMD Value Las Vegas ASD/AMD Variety Las Vegas ASHE Annual ASHE PDC ASIS International Annual Seminar & Exhibits ASR (Action Sports Retailers) Fall ASR (Action Sports Retailers) Spring ASUG Annual Conference & Vendor Fair Atlantic Canada Petroleum Show AudiologyNOW! AUSA Annual Meeting & Exposition Automation Fair Baseball Trade Show BookExpo America CAHF Annual Convention & Expo California Gift Show (January) CAMEX Canada’s Tourist, Resort & Imprinted Product Show Canadian Waste & Recycling Expo Car Care World Expo

Cattle Industry Trade Show CEDIA Central Valley Facilities Expo Central Veterinary Conference West Central Veterinary Conference Central Veterinary Conference East CHA Summer Show and Convention CHA Winter Show and Convention COE Annual PLM Conference & TechniFair COLLABORATE - IOUG Forum Comic Con CONEX Connecticut CONEX Wisconsin Construct Couture Collection Coverings Dakotafest Dealer Expo DEMA Show Dscoop Annual Conference EASA Annual Convention & Exposition EASTEC Environmental Laboratory Convention & Exposition Expo! Expo! IAEE Annual Meeting & Exhibition FABTECH & AWS Welding Show and METALFORM Family Medicine Forum Farmfest Firehouse Central Firehouse Expo Firehouse World Fly Fishing Retailer World Trade Fresh Summit International Convention & Exposition Global Gaming Expo - G2E Global Pet Expo GlobalShop GO-EXPO: Gas & Oil Exposition Golf Industry Show Government Video Expo Greater Philadelphia Facilities Expo Greenbuild Expo GSE HD Boutique Health & Fitness Business Expo Healthcare Convention & Exhibitors Association High Point Market Fall High Point Market Spring Holiday Showcase Hospitality Design HOUSTEX IAAPA Attractions Expo APPENDIX

CEIR Index Report

2009 CEIR Index Participants (continued) ICAST (Int’l Convention of Allied Sportfishing Trades) ICUEE - The Demo Expo IDUG--North America IFT Annual Meeting & Food Expo Imprinted Sportswear Show - Atlanta Imprinted Sportswear Show (Midwest) Imprinted Sportswear Show (Northeast) Imprinted Sportswear Show (South) Imprinted Sportswear Show (Southeast) Imprinted Sportswear Show (Southwest) InfoComm International INNUA’s Global Connect Interbike International Bicycle Expo Interbike Outdoor Demo International Air-Conditioning, Heating, Refrigerating Exposition International Autobody Congress & Exposition International CES International Contemporary Furniture Fair International Hotel Motel and Restaurant Show International Housewares Show International Jewelry & General Merchandise Show Spring International Motorcycle Show - Bay Area International Motorcycle Show - Cleveland International Motorcycle Show - Dallas International Motorcycle Show - Long Beach International Motorcycle Show - Minneapolis International Motorcycle Show - New York International Motorcycle Show - Seattle International Motorcycle Show - Washington DC International Pool & Spa Expo International Poultry Expo and International Feed Expo International Roofing Expo International Security Conference & Expo (ISC) West International Vision Expo East International Vision Expo West Interop New York IPC Printed Circuits Expo, APEX and the Designers Summit IRCE - Internet Retailer Conference & Exhibition IRgA Convention and Trade Show JA International Summer Show JA International Winter Show JCK Show - Las Vegas Kehe Food Show Kitchen/Bath Industry Show La Cumbre Las Vegas Antique, Jewelry & Watch Show Licensing International Magic International - Summer (includes Sourcing Zone)

Magic International - Winter Marine South Marine West MASCON MD&M West Medtrade Medtrade Spring Memphis Gift & Jewelry Show/Spring Memphis Gift & Jewelry Show/Fall Mid-American Beauty Classic Mid-South Jewelry & Accessories Spring Fair Midwest Facilities Expo Midwest Petroleum and Convenience Show Modern Day Marine Montreal Gift Show (Spring) Motorcoach Expo NAB Show NACS Show NAFCU Annual Conference & Exhibition NAILBA Annual Meeting NAMM Show NAON Annual Congress NASSP Annual Convention & Exposition National Automobile Dealers Convention Exposition National Hardware Show National Pavement Expo West National Pavement Exposition National Stationary Show National Teaching Institute & Critical Care Exposition ® Natural Products Expo West NBAA Annual Meeting & Convention New England Facilities Expo New Orleans Gift & Jewelry Show - Fall New Orleans Gift & Jewelry Show - Spring New York International Gift Fair (Winter) NGWA Ground Water Expo NIPA Annual Forum & Expo North Texas Facilities Expo Northeastern Forest Products Equipment Expo Northern California Facilities Expo Northern Illinois Farm Show Northwest Facilities Expo Northwest Machine Tool Expo NSBA Annual Conference Ohio Safety Congress & Expo Ohio Turfgrass Conference and Show Outdoor Retailer Winter Market PACK EXPO Las Vegas/Food Processing Machinery Expo/ CPP EXPO Performance Racing Industry Trade Show APPENDIX

CEIR Index Report

2009 CEIR Index Participants (continued) PGA Fall Expo PGA Merchandise Show Photo Plus Expo PhotonXpo, The Exhibit at CLEO PITTCON Pool Tradeshow Fall Pool Tradeshow Spring Portland Gift & Accessories Show (January) PPAI Expo Premiere Birmingham Premiere Orlando Project Las Vegas Feb/Winter Project Las Vegas Summer Project New York Jan/Winter Project NY Summer RECon RIMS Annual Conference & Exhibition Salon Rendez-Vous HRI Show San Francisco International Gift Fair (February) Satellite Seattle Gift Show (January) SEMICON WEST SGNA Annual Course SHARE Technology Exchange (Summer Show/Space Limit) SHARE Technology Exchange (Winter Show) SIA SnowSports Tradeshow Sign World USA South Florida Facilities Expo Southeast Building Conference Southern Building Show

Southern California Facilities Expo Southwest Facilities Expo Southwest Regional Home Care Conference and Exhibition Sports Licensing & Tailgate Show StonExpo Summer International Fancy Food & Confection Show SuperZoo Supply Side Surf Expo (January) Surfaces SURTEX (R) Texas Association for Home Careâ&#x20AC;&#x2122;s Annual Meeting Texoma Farm & Ranch Show Texworld USA - Summer Texworld USA - Winter The International Builders Show The NAFEM Show The National NeedleArts Association Trade Show The New Chem Show The Original Miami Beach Antique Show The Remodeling Show The SHOT Show Triple Play Realtor Convention & Expo Vancouver Gift Show (Spring) VMS Fall WEFTEC 2009 WESTEC Western Foodservice & Hospitality Expo World of Asphalt World of Concrete USA

APPENDIX

CEIR Index Report

Data Information Form Center for Exhibition Industry Research • Exhibition Industry Growth Index All information provided will be held in strict confidence. No event-identifiable information will be published. If you organize or manage more than one similar event per year (i.e., spring event and an autumn event), please indicate information on the same occurrence of your event for each year listed below in order to maintain year-to-year comparability (i.e., only the spring event. You have four options for submitting data: •

Complete this form and return to Toby Palmer, Veris Consulting, Fax: +1 (703) 796-1331

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Submit the data by e-mailing it directly Veris at CEIRIndex@verisconsulting.com

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Submit the data by entering it into the online tool at https://secure3.verisconsulting.com/CEIR/Login.aspx?ReturnUrl=/CEIR/Default.aspx

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Mail to: CEIR Index c/o Veris Consulting, Inc. 11710 Plaza America Dr, Suite 300 Reston, VA 20190

Organization Name: Mailing Address:

Contact Person: Daytime Phone:

E-mail:

Event Name: 2010

2009

2008

Event Dates:

___________________

Event Location (City):

___________________

Total Net Exhibit Space:

___________________

Please list total exhibit net square feet sold for your event, including space provided for non-cash consideration (does not include aisle space or meeting rooms).

Total Exhibiting Companies at the Event:

___________________

Please list number of companies and other organizations with exhibit space at your event. Include exhibit space swapped or provided for other non-cash consideration.

Total Professional Attendance at the Event:

___________________

Please tell us the number of professionals attending your event. Exclude exhibiting company personnel, friends and family, staff, or other non-business attendees.

Total Revenue of the Event:

___________________

Please list the total revenue for your event from all sources: the sale of exhibit space, conference fees, advertising, sponsorships and all other revenue.

Signature_________________________________________________________________Date_________________________ Thank you for participating in The CEIR Exhibition Industry Index Report! APPENDIX