ArtTactic Chinese Contemporary Act Confidence Survey reveals that the primary market is strengthening against a weakening auction market which bodes well for the long-term health of the art market as a whole.

After a 35% drop in art market confidence in November 2012, ArtTactic’s Chinese Contemporary Art Market Confidence Indicator is now at 57, up from 49, and the same level as when the first report was published in December 2009. (Above 50 indicates there is more positive than negative sentiment among survey respondents.)

This positive news may mean that the effects of the 30% correction following the market peak in 2011 are finally dissipating. As the report notes:

A total of 18% of the experts surveyed believed the market will go up in the next 6 months (up from 7% in November 2012), a further 70% believe the direction of the market will be flat (against 56% in November 2012) and a small minority of 12% believe the market will fall further in the next 6 months (down from 37% in November 2012).

Since November, the Primary Art Market Indicator (galleries) has risen from 54 to 64 (a 20% rise), whereas the Auction Market Indicator fell from 48 to 46, further into negative (sub-50) territory. Auction revenues from contemporary art by the main four auction houses (Sotheby’s, Christie’s, Poly Auction and China Guardian), reached $156 million in spring 2011, but dropped back to $58 million in the autumn of 2012 — a 63% fall in auction sales. So the auction market, which tends to be more conservative in taste (but also more speculative) than the primary market, remains “fragile.” In fact, the Auction Indicator has fallen 45% since March 2011.

Conversely, the primary market, which tends to be more experimental, and with broader and lower average sale prices, has strengthened. This is important, because while auction sales are important public measures of trading volumes and prices, the primary market supports the long-term health of a contemporary-art market (a contemporary-art market with no primary market will eventually asphyxiate).

Confirmation of the positive trend may come during ArtBasel Hong Kong.

In terms of individual artists, the most interesting point of note regarding the longevity chart is that 14 artists are ranked as having medium to high longevity (projected importance in 10 years time), and with no low longevity. Also interesting is that the top three positions are held by conceptual and new media artists: Cai Guoqiang, Yang Fudong and Ai Weiwei.