Visitor numbers have been down at recent crafts events, but sales seem to be holding their own. We look at the impact of the economic downturn on the sector as a whole, and how the demographics of consumption may be shifting. This has various possible implications for the markets in luxury items and in smaller purchases, and we examine ways the crafts sector may be well placed to weather these leaner times.

Dr Karen Yair, Research & Information Manager, Crafts Council, 20 April 2009

Sales at three key contemporary craft retail events held in late 2008 provide an early indication of the specific impact of general economic downturn on the contemporary crafts sector. The three events were Origin (the London Craft Fair), Lustre (the East Midlands Craft Fair) and the Hereford Contemporary Craft Fair in the West Midlands, all in October or November 2008. At all three events the pattern was broadly similar. There was a slight decrease in visitor numbers, yet this had little or no discernible impact on sales figures. Consequently there was an overall increase in spend per visitor.

It is still too early to gauge the longer-term impact of recession on the market for contemporary craft. All the same it is clear that economic conditions are prompting consumers to reappraise how and what they value. This could mean a dip in spending on contemporary craft items, to match the downturn in demand observed for some mass-manufactured luxury goods (such as high-quality watches)¹; or else it could encourage greater spending, as contemporary craft fills a gap for art collectors and fashion devotees now avoiding fine-art or haute-couture purchases. Affluent buyers may also be tempted into the type of 'compensation buy' currently seen in the health and beauty sector², where consumers cutting back on larger expenditure (holidays, new cars) seek to compensate via more luxurious smaller purchases. If the recession is long-lasting, the shift in consumer priorities may entail a third scenario: a higher valuing of quality products which last, with a new emphasis emerging on well-made functional craft items.³

'We are seeing an interest in people investing in craft as something tangible and of long-term value,' confirms Maureen Bampton, Director or the Bluecoat Display Centre, Liverpool, 'at a time when other investments appear far more precarious. My sense is that people want to buy less, but of better quality, and galleries and retailers that reflect this are under less pressure than retailers competing in a more saturated market with high turnover of cheaper stock.'

Most probably the demographic of the contemporary crafts consumer will shift. Among those protected from economic downturn are the more affluent and retired. They are perhaps the most likely to maintain pre-recession consumer trends in individual identity and distinctiveness, connoisseurship and authenticity. Nevertheless, a greater proportion will downsize from fine-art or haute couture acquisitions, or make compensation purchases. Meanwhile, the traditional core market for the crafts - the middle-income, professional, style-conscious woman buying craft to enhance her sense of style - may become proportionally less important in the contemporary crafts marketplace, as levels of personal disposable income within the working population dwindle.

On the supply side, contemporary crafts businesses are perhaps better equipped to survive an economic downturn than some other creative industries sub-sectors.

First, crafts businesses have a flexibility, born both of their size (most are sole traders) and the low levels of capital investment in their businesses, meaning they can respond quickly to fluctuations in market demand. Second, unlike the architecture or advertising sectors, the dependency of craft businesses on other industries is relatively low. Some craft businesses are over-dependent on a small number of clients, but many work across sectors, supplying fashion businesses, delivering community-arts contracts or making theatre props. This portfolio approach to business not only provides resilience to consumer trends, but also demonstrates the craft maker's characteristic capacity to innovate, in business practice as well as in the work itself.

Finally, contemporary crafts operations are well placed as businesses to develop existing and new export strategies that take advantage of sterling's current weakness in the world marketplace. Often exporting long before other creative businesses in the business life-cycle, craft entrepreneurs are known to be strongly motivated in this area; with the proliferation of content-rich online selling mechanisms, this is surely a strength.

Despite these strengths, crafts businesses face several current challenges. Makers are expressing concern about the stability of the sector's retail and gallery infrastructure. Elsewhere in the supply chain, increased production costs are seen as a threat, including workshop hire, such industrial processes as glass finishing and polishing, or components and raw materials.

Furthermore, while craft businesses are inherently creative, and strong on innovation, the skills required to diversify may be less well developed. The Crafts Blueprint, a sector-led skills plan due for launch in May 2009, strongly urges that makers develop commercial skills, as well as a firm balancing commitment to the highest quality of making, design and creative engagement. Crafts businesses should be able to articulate their Unique Selling Points and the value of their work, should develop ambition, and should seek out new ways to apply their creative craft skills - the Blueprint identifies the need for skills specialists who can support these aims. Finally (and in the context of the Government's Business Simplification Support Programme) the Blueprint also urges that generic business support programmes evolve to meet the needs of creative businesses, including those in the crafts sector.

In summary, the market for contemporary craft is likely to change, in the context of the downturn. Crafts businesses certainly demonstrate the capacity to evolve and diversify in response to nascent consumer trends - yet support for and investment in sector infrastructure and skills will be needed if the sector is to thrive through and beyond a recession. Nevertheless, says Bluecoat's Maureen Bampton, 'Craft will always be an investment in quality, and for this reason I believe will weather the current storms.'

1. 'Richemont sees grim outlook for luxury goods', Haig Simonian. Financial Times, 19 January 2009
2. 'Little Luxuries Faring Well in Flagging Economy', Tovia Smith, NPR, 26 January 2009
3. 'Creative and Cultural Skills', Crafts Blueprint, 2009