The global art market totaled USD 65 billion in 2023, contracting by 4% year-over-year but remaining above its USD 64.4 billion pre-pandemic high, according to The Art Basel and UBS Global Art Market Report 2024, authored by Dr. Clare McAndrew, the founder of Arts Economics. The report can be downloaded for free here.

The market was constrained by factors including thinning sales at the highest price levels, high inflation and interest rates, an ongoing war in Ukraine, a new war in the Middle East, and uncertainty about economic growth in China. Those surveyed for the report also cited higher costs for things such as logistics and rent.

Here are seven key takeaways from The Art Basel and UBS Global Art Market Report 2024.

1. Global sales totals fell but remained above pre-pandemic levels, driven by higher volume

Global art sales decreased by 4% from their 2022 level of USD 67.8 billion to an estimated USD 65 billion but remained above the 2019 pre-pandemic level of USD 64.4 billion. All the major art markets aside from China saw marked declines in sales total. This was offset by an increase in volume, with 39.4 million transactions, up by 4% on 2022, driven by strength at the lower end.

2. The US remained the largest art market, despite a notable drop

The US maintained its position as the largest national market, commanding 42% of sales by value, or USD 27.2 billion. This was despite a contraction of 10% from the USD 30.2 billion figure in 2022, which was its highest level to date. The 2023 value was just below the pre-pandemic level of 2019. Thinning sales at top price rungs hit the US market, where the highest-priced works are typically traded, particularly hard. Additionally, dealers struggled with higher expenses in the wake of the COVID-19 pandemic.

3. China surged past the UK to become the world’s second-largest market

Sales in China grew by a remarkable 9% to an estimated USD 12.2 billion from the previous year’s level of USD 11.2 billion. It bucked the trend of slowing national markets, emerging from COVID lockdowns to see an especially strong first half in the auction sector as a backlog of inventory came to the block – standing out as the only major national market to see growth at the top end. Art fairs in both mainland China and Hong Kong also ramped back up to full speed, driving dealer revenue higher.

The UK, meanwhile, saw its market drop by a stiff 8% to USD 10.9 billion in 2023 from its USD 11.9 billion level in 2022. As another hub for the priciest material at auction, it was strongly affected by the decline in trading at the top end.

4. Dealers struggle with higher costs and reluctant buyers, but do better at the lower end

Smaller galleries and dealers with turnover under USD 500,000 had the largest increase in sales (11%), while those with turnover exceeding USD 10 million saw an average decline of 7%. While performance was mixed across various sectors, dealers overall saw sales slow by 3% year-over-year to USD 36.1 billion from their 2022 level of USD 37.2 billion.

5. Auction houses see even greater challenges than dealers

Private sales at auction houses ticked up by 2% year-on-year, as consignors apparently opted to keep their sales out of the public eye in an uncertain market.

Public auction sales saw a more pronounced decline than their dealer counterparts. There, sales fell by 7% to USD 25.1 billion, compared to the dealers’ 3%. The contraction could have been worse, but for auction sales in China that, in the first half of 2023, offered material from sales scheduled for 2022 but were postponed due to pandemic lockdowns. Auction sales decreased because of thinning at the top end, after a record year in 2022, which was fueled by robust sales at the high end.

6. Digital commerce may have found its level in the art world

Online sales increased by 7% in 2023 to total USD 11.8 billion, or 18% of the market, in line with other industries. That is an increase from 16% of the market in 2022. In 2023, dealers’ own websites were collectors’ preferred venue for making these purchases, perhaps reflecting a maturing of this sector of the market.

7. Most dealers remain optimistic looking to 2024

Looking ahead to 2024, 36% of dealers expected an uptick in sales, while 48% expected turnover to remain stable, and 16% predicted a decline. Compared to the end of 2022 when the smallest dealers expressed the most optimism, in 2023 the largest dealers were most hopeful, with 54% expecting an increase.