The quarterly PRCA Consultancy Barometer for Q1 2017 found more than half (52 per cent) of agency professionals expect the UK economy to worsen over the next 12 months, with just 14 per cent expecting it would improve.
This compares to a third of respondents predicting an economic downturn in the Q1 and Q4 2016 surveys. The PRCA did not conduct its regular barometer in Q2 and Q3 2016, instead focusing on Brexit-specific questions.
This predicted downturn is not yet reflected in agencies' budgets, however. For Q1 2017, 32 per cent of the 50 respondents to the survey said client budgets had increased over the period, with the majority (52 per cent) saying they had stayed the same.
This is only a marginal decline on the 36 per cent and 33 per cent of firms reporting budget growth in Q1 2016 and Q4 2016 respectively.
The proportion of consultancies describing their new busines operation as 'very busy' in Q1 2017 was 22 per cent, down from 33 per cent in the final quarter three months of 2016, but an increase on the 11 per cent level seen in the pre-Brexit referendum days of Q1 2016.
Recruitment intentions among the firms surveyed are also on the rise - 58 per cent of agencies in the Q1 2017 report said they expected staff numbers to increase in the following quarter, compared to 53 per cent in Q4 2016 and 31 per cent in Q1 2016.
PRCA director-general Francis Ingham said: "Despite uncertainty about the economy in general, the PR and communications industry is booming. This benchmarking report brings plenty of good news -we have seen increases in client budgets, in staff numbers, and in new business levels.
"Industry leaders are, however, paying close attention to the ongoing Brexit negotiations. Like any other sector, the PR and communications industry wants a deal that delivers maximum growth and stability to underpin the fundamental strengths that we enjoy currently."