Bellwether points to drop in PR budgets

The latest IPA/BDO Bellwether Report suggests that the PR industry may be struggling more than other marketing disciplines.

The gloomy news came as Freshwater UK announced its intention to delist from the stock exchange owing to the tough trading environment.

The Bellwether survey found that overall marketing budgets were revised marginally upwards during the third quarter, but that PR budgets may still be falling.

The 'all other' category, which includes PR and other below-the-line disciplines, was revised down again, although rates of budget trimming have eased since Q2. The proportion of companies in this category reporting an increase was less than those signalling a decline, resulting in a net balance of minus 3.6 per cent. However, Lord Bell, chairman of Chime Communications, said he felt the market environment was relatively positive in terms of public affairs, financial PR and corporate activity.

But he added: 'The Government spending cuts have not yet been announced and all the speculation is bound to affect confidence. Later we will discover if it has an actual economic effect.'

Lord Chadlington, chairman of Huntsworth, commented: 'In the context of the most draconian public sector cuts for several generations, is it surprising companies are sounding a note of caution? I do not wish to sound like Polyanna, but I take some cheer from this report.'

The findings come as AIM-listed Freshwater has announced it is seeking shareholder approval for the cancellation of its listing.

In a statement to the stock market, the firm blamed 'a lack of market enthusiasm for funding small companies, the depressed share price and the absence of meaningful liquidity'.

Meanwhile, Havas announced organic growth, excluding variations in exchange rates and scope of consolidation, of 2.9 per cent during the first nine months of 2010.

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