After a brief respite last year from sales volume declines, the average exhibit builder experienced a 12.5% drop for the 12-month period, the results of the 2005 Exhibit Builder Economic Survey show.

The average sales volume for all respondents was $5,158,824.00, down from $5,895,524.00 last year. The total sales volume of all respondents was $263,100,000, up from last year's $247,612,000.

Those respondents in the category of "other," which includes architecture, point-of-purchase, exhibit materials supply, and full-service marketing firms that are involved in either exhibit design and/or construction, had the highest annual sales volume at $9,562,500.

Custom exhibit builders were next at $5,864,000, followed by system and structural manufacturers with an average annual sales volume of $5,050,000. Modular and portable dealers and distributors averaged $3,230,769 and exhibit design firms had an average annual sales volume of $2,750,000.

Just about everyone thinks there's an economic recession going on in the exhibit industry. But it doesn't necessarily relate to just that drop in top line income. Rather, judging by comments from respondents, it's in part because of rising costs and resulting pressures on the bottom line. Higher fuel costs and employee health insurance premiums were two areas that gained notable mention from respondents.

The declines in sales volume are significant on their own, however. Overall, for those exhibit builders who had a drop in their annual sales, the hit was 8.64%. The modular sector suffered the largest average decreases at 14%. By comparison, average increases for those who had higher sales volumes were generally meager. While modular dealers and distributors enjoying increased sales averaged 10% higher, overall respondents with greater sales averaged just a 4.67% gain over the prior year. Custom builders with improved sales over the prior 12 months were just 3.5% higher.

Like last year's survey, the split between modular dealers and distributors with higher or lower sales volume was the most pronounced among the various categories of responding companies. This points to continued volatility in the field and may be attributable in part to discounting, which may result in increased top lines. It's important to note, however, that discounting, while increasing the top line, will have a resulting impact on the bottom line – more money in the door doesn't necessarily equate to higher profits. The Exhibit Builder Economic Survey has never attempted to measure respondent profits, however.

The number of full-time employees in the typical responding company is down significantly this year from 43.95 last year to 38.31. The number of part-time employees was virtually unchanged at 5.8. It is likely that the decline in the number of employees is simply a function of the sample chosen for the survey and the companies that responded (see the note at the end of the article for an explanation of the methodology employed). In the 2004 survey, more than half of the respondents said they were planning to add staff during the coming year.

In this year's survey, nearly half, 47.1%, said they are planning to add staff, while 13.7% of respondents said they plan to reduce staff. Most additions are planned in shop and service staff, while most reductions are planned in management and office staff.

Trade show-related income was nearly unchanged from last year at 69.14% of the typical responding company's sales volume. Museum work jumped from 8.71% to 13.50% of sales volume. Mobile exhibits, too, were higher at 6.78% as compared with last year's 2.62%. Special events and meetings income dropped to 2.8% of the average sales volume and other types of income were down to 8.93% from 13.55%. ("Other" income is typically storage, graphics, refurbishment, point-of-purchase, and similar related work.)

Overall, custom work accounted for 42.15% of the typical respondent's sales volume. Design was 10.94%. Exhibit rentals were 4.24% of sales volume. Refurbishment was 9.86%. And service and installation and dismantle accounted for 7% of the typical responding company's income.

Nearly three-quarters of responding companies do business internationally. This was down somewhat from nearly 80% in last year's survey. Asia and Canada were the largest destinations for international work. The international portion of income accounted for 4.56% of the typical company that does work for clients from abroad.

So income is down, costs are up. Is it just the toss or turn year in the typically roller coaster-like economics of the exhibit industry? Perhaps, but probably not. Exhibit houses have been operating on a remarkably productive basis for many years, according to the results of the survey. For example, even with sales down this year, the average amount of sales per employee increased slightly.

How The Survey Was Conducted

The Exhibit Builder Economic Survey is mailed to potential respondents who are selected from a master database. Three-hundred and fifty potential respondents were selected to receive the survey. Over the years, the size of the database has varied from between approximately 750 and 1,500 records. While the selection of individual companies is random, the database itself has been maintained to reflect the national statistical segmentation of the exhibit design and fabrication field.

The regional distribution of companies that receive the survey and, thus, which respond, is determined by the relative frequency with which they appear in the total base of potential respondents. The regional distribution of the database is roughly approximate to the regional distribution of exhibit designers and builders. Generally, builders from between 35 and 40 states receive the Exhibit Builder Economic Survey questionnaire each year.

Responses from each category of exhibit design and construction generally represent their distribution in the larger population. It is important to note, however, that respondents are able to list themselves under multiple categories. For example, a custom builder might also be a modular dealer and/or a structural system manufacturer. Companies in the database are categorized according to what the researchers know their primary business operations to be. So, for example, a company whose primary business is custom construction, but which also handles a modular system, is considered to be a custom builder for the purposes of categorization in the master database.

Responses are analyzed using a variety of descriptive and inferential statistical techniques, as appropriate, along with tests to determine the reliability and validity of the data. Results reported have at least a 95% level of confidence.

Comprehensive Results

A report of comprehensive results of the Exhibit Builder Economic Surveys from 1991 - 2005 is available for $375. The report contains detailed tables about a variety of economic trends in the industry, including analysis of its various segments. eb