PR professionals thrive on optimism but find themselves facing an economic paradox today.
On the one hand, marcoms indicators are good. ITV's results last week showed a major uplift in TV advertising. Meanwhile, WPP's full-year results last Friday showed 3.7 per growth in PR and public affairs revenues, with a noticeable uplift (5.6 per cent growth) during the final quarter of 2010.
The PRCA's Leaders Panel - polled in January - also showed an upswing in optimism among PR professionals from the start of this year. Eighty per cent of consultancy bosses said they were more optimistic about their company's prospects than one year ago.
On the other hand, indicators on the wider economy are gloomy. GDP growth is sluggish, possibly non-existent; the public sector is being slashed to the bone and retailers are lobbying the Government to relieve their 'pain'.
Sir Martin Sorrell described it thus: 'Budget optimism in 2009 was replaced with pessimism in 2010. Perhaps 2011 budgets will finally reflect realism.' And one can see why.
The PRCA's survey revealed that in-house PR professionals - the people with the budgets - were significantly more pessimistic about 2011 than their agency counterparts. Just two-thirds said they were more optimistic about their business than in January 2010. More than half said the prospects for the UK economy had worsened since then.
The harsh truth is that clients are still pitching out PR business enthusiastically but demanding much more for their money. So while we may well discover double-digit revenue growth for many PR consultancies during 2010, this was on a low base and margins may have been eroded.
With the sudden loss of the cash cow that was the COI (News analysis, p3) it is going to be exceptionally difficult to emulate that double-digit growth for 2011. Things are undoubtedly better in the UK marcoms and PR sector than they were a year ago but we are unlikely to return to the growth rates of 2002-07.
All of which means there are indeed grounds for optimism, tempered with realism, as we enter the warmer days of spring. But we call on the coalition Government to nurture the welcome green shoots and to please avoid trampling over them amid its cost-cutting fervour.