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our economic impactEN gets the first look at the latest Facetime-commissioned study into the uK exhibition industry's economic impact and the breakdown of spending by organisers, exhibitors and visitorsspecial report26 www.exhibitionnews.co.uknormally possible, potentially leading to new export opportunities for the UK."When examined on a per-event basis, the improved performance is even more evident: The value-added contribution per event increased by a third in real terms between 2005 and 2010, while the total employment supported per event increased by more than 20 per cent. "This increase in value per event suggests that the decline in the number of events has been the result of fewer small exhibitions taking place - a view supported by industry stakeholders."Achieving relevAnceAEO chief executive Karim Halwagi said the EIS research was critical in gauging how significant the exhibition industry is to the UK economy. This was especially important given the maturity of the industry and the increased need and desire for recognition from many levels all the way to government. FaceTime's launch as a promotional body in 2010 to showcase the events industry also triggered the need for a fresh report qualifying events as a serious media channel. "We were happy with the results, which indicate that despite the economic downturn we have been facing since 2008, and the launch of the first economic report in 2005, we've seen a net increase in expenditure in events," Halwagi said. "This growth in value has also been achieved even as the sampling of shows dropped. "The figures demonstrate the resilience and strength of our industry. They also tell local and national governments the significant contribution our industry makes to regional and national economic growth, and how we have provided jobs and stimulated business for hundreds of other industry sectors."Halwagi also pointed out the figures are a great sales tool for organisers to illustrate the power of the medium and show the robustness of live events as a media channel. "For organisers, this is our clearest indication that the industry still has untapped potential," he added. OrgAniser spendingAs well as the impact of exhibitions as an industry in its own right, the EIS authors analysed where UK event organisers are accruing and spending their income. Trade event organisers were shown to derive 86 per cent of total income from space rental, against 74 per cent for public exhibition organisers. In terms of expenditure, the largest proportion of costs for trade show organisers was staffing (26 per cent), our employment footprint similar to the UK's car manufacturing industry, Oxford Economics claims. The direct impact of the exhibition industry on GDP combining event organisers, exhibitors, venues and visitors was £2.6bn, supporting 76,300 jobs. However, as Oxford Economics and KPMG point out, exhibitions generate significant activity outside the activity captured in the revenues of exhibition venues and organisers. To produce this £2.6bn contribution, the sector makes purchases from its UK supply chains, generating another £1.8bn in value-added spending and supports another 41,900 jobs across the country. The EIS report uses a variety of sources, ranging from The Facts 2011 and research by Vivid Interface to the Office for National Statistics, VisitBritain, Exhibition Bulletin and end-user surveys. "Businesses participating at exhibitions spend considerable amounts developing stands and accommodating staff; spending which falls outside of the narrow definition of the sector," the EIS authors stated. "Similarly, the millions of people that attend exhibitions annually inject monies into a variety of different sectors as they travel to exhibitions, possibly stay overnight, and make purchases in the surrounding locale of the venue."It is this wider definition of the exhibition industry - incorporating event organisers, venues and exhibitor and visitor participants - that this study uses as its base in the calculation of the economic impact of the sector on the UK economy."Better vAlueThe EIS figures are based on 1,581 events in 2010, down from 1,800 in 2005, and don't include activities under 2,000sqm. The events portfolio breaks down into one-day trade (6 per cent), multi-day trade (28 per cent), one-day public (14 per cent), multi-day public (45 per cent) and outdoor events (7 per cent). Although we've witnessed a 10 per cent drop in the number of exhibitions in the UK, the EIS report argues the industry's combined value-added contribution grew by 18 per cent (in real terms) between 2005 and 2010, with employment increasing 9 per cent. On a per-event basis, the value-added contribution of the sector increased by 33 per cent in the last five years, while employment grew 20 per cent. "While this report has focused on the quantifiable impact of the UK's exhibition sector, the catalytic benefits of exhibitions should not be ignored," the EIS authors continued. "Exhibitions present exhibitors with a means of selling their products to a wider audience than n 2005, a report was commissioned from Oxford Economics and KPMG to estimate the financial impact of the UK exhibition industry on the UK economy. Their investigations found exhibitions contributed £3.5bn in direct net expenditure and a further £5.8bn in indirect and 'induced' impact, resulting in a total economic impact of £9.3bn. Fast forward five years and FaceTime, the promotional body for the live events industry established by the Association of Event Organisers (AEO), has called on the two research firms to again investigate the impact of exhibitions on the UK's economy in the face of economic hardship. What a choppy five years it has been. The industry has gone from the buoyant early years of the Noughties to significant consolidation, mergers and acquisitions, a global recession, ongoing economic challenges and an increasingly bigger push by UK organisers abroad. At the same time, media and the way we communicate has been transformed by the Internet, social media and smartphones, which have opened new marketing channels while threatening the livelihood of others. All have also changed the way brands are perceived and the ROI expected by brand owners on their media activities. Given this seismic shift in how brands and media are viewed, and the risk-averse nature of today's businesses, what shape would you expect the exhibition industry to be in? Just how much of a dent are we making in the UK's economic landscape? If the results Oxford Economics and KPMG generated in their newly released Economic Impact of the UK Exhibitions Industry study (EIS) are anything to believe, our value is better than ever, even if we're holding less events. According to the EIS, exhibitions delivered a total economic impact of £11bn and a gross value-added (GVA) contribution of £5.6bn to the UK economy in 2010, against inflation-adjusted figures in 2005 of £10.6bn and £4.7bn respectively. The £11bn figure is made up of three types of impact: Direct, indirect and induced impact; the latter referring to employment and activity supported by those directly or indirectly engaged by the sector, spending their incomes on goods and services in the wider UK economy. The industry's £5.6bn value contribution represents 0.4 per cent of UK GDP, while the 148,500 jobs we support equates to 0.5 per cent of total UK employment. As a comparison, our industry's economic impact is twice the size of the UK's agricultural sector, and i

Special reportwww.exhibitionnews.co.uk 27 DIRECT INDIRECT INDUCED TOTAL IMPACT IMPACT IMPACT IMPACT2005 REsULTs (2005 PRICEs) Number of events 1,800Net expenditure/output (£bn) 3.5 3.8 2.0 9.3Gross value-added (GVa) (£bn) 1.7 1.6 0.8 4.1tax (£bn) 0.5 0.3 0.2 1.0employment 55,800 53,500 27,300 136,6002005 REsULTs (2010 PRICEs)Net expenditure/output (£bn) 4.0 4.4 2.3 10.6GVa (£bn) 1.9 1.8 0.9 4.7tax (£bn) 0.6 0.3 0.2 1.12010 REsULTsNumber of events 1,600Net expenditure/output (£bn) 4.9 3.8 2.3 11.0GVa (£bn) 2.6 1.8 1.2 5.6tax (£bn) 1.2 0.8 0.5 2.5employment 76,300 41,900 30,300 148,500organisers accrued an estimated income of £1.6bn. This contrasts with expenditure of £1bn in 2010, representing a £580m profit. Another key component of the new EIS report is the number of exhibitors and visitors coming to exhibitions and how much each group spends on participating. The report found 265,000 exhibitors were present in the 1,600 events recorded in 2010, averaging 165 exhibitors per event. Of these, 20 per cent were from outside the UK. This compares with 150 exhibitors per event in 2005.Combined, exhibitors spent nearly £2.7bn on goods and services to take part in events. Renting space proved to be the primary outlay overall, accounting for more than £850m in expenditure during 2010. Other significant expenses included the design and build of stands (£400m), followed by travel and accommodation for staff (£350m). followed by marketing (23 per cent), feature build, carpeting and furniture (22 per cent) and space rental (19 per cent). Public exhibition organisers meanwhile, spent the most on space (35 per cent) followed by marketing (25 per cent), feature build, carpeting and furniture (19 per cent) and staffing costs (18 per cent). Overall, EIS claimed the average income per event is more than £1m today, meaning event EXHIBITION INDUSTRY: THEN aND NOw DIRECT INDIRECT INDUCED TOTAL IMPACT IMPACT IMPACT IMPACTVIsITORs Net expenditure/output (£bn) 1.4 1.1 0.6 3.2GVa (£bn) 0.7 0.5 0.3 1.5employment 26,000 11,900 8,100 46,000ExhIbITORsNet expenditure/output (£bn) 1.8 1.3 0.9 4.0GVa (£bn) 0.9 0.6 0.4 2.0employment 25,100 15,000 11,000 51,100ORgANIsERsNet expenditure/output (£bn) 1.3 1.2 0.7 3.2GVa (£bn) 0.8 0.6 0.3 1.7employment 20,200 13,200 8,600 42,000VENUEsNet expenditure/output (£bn) 0.3 0.2 0.1 0.6GVa (£bn) 0.2 0.1 0.1 0.3employment 5,000 1,900 2,600 9,5002010: CONTRIBUTION BY CHaNNEl Of ImpaCTNote on graphs: Individual figures displayed above are rounded up to the nearest decimal point. Source: The Economic Impact of the UK Exhibitions Industry, February 2012