Analysts at Merrill Lynch have slightly downgraded their global advertising forecasts for 2003 from 3.0% to 2.7%, due to tougher than expected comparisons with 2002, a deterioration of the European economy and a tentative start to this year.
Europe is traditionally slower into and out of a downturn than the US and this is being borne out at present, with improvements in Europe still much weaker than in the US. This weaker performance is dragging down the overall global growth figures.
In addition, a stronger than expected close to 2002 spending means that the year on year comparisons moving towards the end of 2003 will show a lower relative growth than previously anticipated.
The threat of war with Iraq is contributing further to a sense of uncertainty and hesitancy amongst the media and advertising sectors, although Merrill Lynch has not explicitly factored this into the forecasts (although they are ‘negatively biased’ as a result of these conditions).
The broker has also downgraded its 2003 US forecasts by 3.0% points from 4.0% to 3.7%.
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