Conditions ‘Overwhelmingly Negative’ For UK Regional Press
Having so far escaped the advertising recession relatively unscathed, the UK’s regional press may be in for a tougher period as economic and consumer factors turn against the sector. According to economists and media analysts at Merrill Lynch, the outlook for critical factors is now ‘overwhelmingly negative’.
“Consumer confidence is deteriorating, car registrations are slowing, property price expectations are falling and employment growth has halted,” the broker grimly reports. More broadly, its economists are expecting that there will be a slowdown in consumer consumption, rather than a complete collapse.
So far, buoyant consumer confidence and resilient local market conditions have kept the regional press sheltered from the worst of the advertising downturn. In contrast, national newspapers, television and the business press especially, have all suffered from a substantial deterioration in revenues.
Following an overall ad revenue growth of around 1.3% to £3.5 billion last year, sales performance at regional publishers has so far been mixed, according to Merrill. Johnston Press is seeing revenues up 1-2% in the year to date (see Johnston Press Remains ‘Acquisitive’ As Profits Rise); Newsquest is up 1% and Trinity Mirror is looking flat to slightly down (see Bailey Moves To Stop Mirror-Sun Price War As Costs Hit ).
Advertising forecasts Merrill Lynch is now predicting that the regional press sector as a whole will see 2% growth this year, followed by a 2-3% rise in 2004. The previous forecasts put 2004 growth at 3-4%.
The latest forecasts from the Advertising Association (AA), from its December 2002 release, are included below. They are more optimistic than Merrill Lynch’s expectations, but it is possible that the AA will revise downward the figures in its next release.