New estimates from American analysis Goldman Sachs predict 2005 to be the US newspaper industry’s worst since the last advertising recession, with further gloom forecast for 2006.
“2005 is shaping up as the industry’s worst year from a revenue growth perspective since the recession impacted 2001-2002 period,” the analyst claims, adding that growth next year is “very unlikely.”
According to the new forecasts the depressed market is due to an under-performance in national advertising, which has remained flat this year, as has the retail category.
There is some optimism for newspaper advertising, however, with the classified sector in both print and online showing positive gains so far this year, up between 4% and 5%.
Goldman Sachs has scaled back its expectations for the US newspaper industry, predicting 2006 growth to fall at 3.5% rather than its previous forecast of 4%. The analyst believes that national ad growth will be at its lowest at 1%, followed by retail at 2.5% and classifieds at 3.6%.
The newspaper industry can seek comfort from online advertising revenues, however, which are expected to grow by a solid 25% year on year in 2006. However, online will continue to represent a relatively meager 5% of total newspaper revenues.
Related Links
