Merrill Lynch Downgrades US Radio Growth Forecasts
Merrill Lynch is reducing its 2003 US radio advertising growth forecast from 4.3% to 3.3%, giving a total spend of $19.5 billion. Analysts say that the downward revision is an attempt to ‘wipe the slate clean’ and avoid any further downgrades.
“Although the war in Iraq is approaching a favorable resolution, investors will likely shift their attention back to domestic issues, including a prolonged weakness in the US economy and the possibility of a double dip recession. Given the lingering geopolitical uncertainty and weak economic data, it is unclear when the radio business will return to its pre-war pace and industry weakness could spill-over into May,” says the report.
Accordingly, forecasts for April are reduced from 5.0% to -2.0% and for May from 5.0% to flat, as shown below.
| US Radio Advertising Growth Forecasts | ||
| Previous | New | |
| January | 6.0 | 6.0 |
| February | 7.0 | 7.0 |
| March | -1.0 | -1.0 |
| Q1 2003 | 3.7 | 3.7 |
| April | 5.0 | -2.0 |
| May | 5.0 | 0.0 |
| June | 5.0 | 5.0 |
| Q2 2003 | 5.0 | 1.1 |
| July | 4.0 | 4.0 |
| August | 6.0 | 6.0 |
| September | 3.0 | 3.0 |
| Q3 2003 | 4.3 | 4.3 |
| October | 3.0 | 3.0 |
| November | 4.0 | 4.0 |
| December | 5.0 | 5.0 |
| Q4 2003 | 4.3 | 4.3 |
| FY 2003 | 4.3 | 3.3 |
| FY 2004 | 7.6 | 8.1 |
| Source: US RAB/Merrill Lynch, April 2003 | ||
