Worldwide advertising and marketing services spending is set to rise by at least 4% this year, according to advertising giant WPP.
It said that worldwide economic conditions seem set to continue to show steady growth in 2007, although concerns remain over the Middle East, oil and commodity prices and the twin deficits of the US economy.
WPP added that although growth in the world economy continues to be led by Asia Pacific, Latin America, Africa and the Middle East, Russia and the other CIS countries, even Western Continental Europe may continue the improvement seen in the second half of 2006 together with the UK, where growth in the second half of 2006 was almost double that of the first half.
The latest Ernst & Young Independent Treasury Economic Model Club Winter forecast for the UK economy, published in January, predicted growth in GDP of 2.9% in 2007 (see UK Economy Predicted To Grow 2.9% In 2007).
According to WPP, the world’s second-largest advertising group, 2007 should benefit from the build-up to the US presidential elections and the Beijing Olympics in 2008, as well as the European Football Championships.
However, WPP says that in the short-term, growth in advertising and marketing services expenditure may remain in low to medium single digit territory, given the low inflationary environment, concentrating distribution and consequent lack of pricing power.
In the long-term though, the outlook appears very favourable. Advertising and marketing services expenditure as a proportion of gross national product should resume its growth and burst through the cyclical high established in 2000, says WPP.
Meanwhile, speaking at the International Monetary Fund (IMF) annual press conference, IMF managing director Rodrigo de Rato said that after four years of strong growth, the IMF expects that global economic growth will remain solid in 2007, approaching 5% (see IMF Predicts Robust Global Economy For 2007).
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