NAA Predicts Revenue Growth Momentum For US Newspapers
US newspaper advertising could grow by as much as 6.1% this year, according to a high-end forecast from the Newspaper Association of America (NAA). The group has also produced a more conservative estimate which puts growth at 3.2% for the year.
Military confrontation could cause the US economy to fall either way: Historically, it is more common for a war economy to receive a boon from military spending; this has been the case in World War I and World War II, as well as the Korean and Vietnam conflicts. However, during the Gulf War in 1991, both consumer spending and business investment plunged. Conaghan asks which pattern would occur in the event of war with Iraq.
“It may depend in part on the timing and duration of events. Should war break out this winter, the economy may not have enough forward inertia to overcome [the current] sluggish investment environment. If fighting commences a year from now, then domestic economic recovery, coupled with increased federal spending, might well reflect the more traditional earlier pattern of continued growth,” he writes.
Despite this ‘overhang of uncertainty’, the advertising performance should be better in 2003 than it was last year. Current indications are that the conservative 3.2% newspaper growth is the more likely scenario, with the dollar gain largely accounted for by inflation.
Conaghan also notes that Wall Street forecasts are roughly in the same range, with Salomon Smith Barney projecting a 2.0% gain and Credit Suisse First Boston predicting an increase of 4.0%-6.0%.
