The Plimsoll research out this week into the state of PR points to
mixed fortunes for the sector. It contains enough worrying indicators to
create despondency among agency heads, but it also sends encouraging
signals that the end of the slowdown is in sight.
It should come as no surprise to agency bosses who have cut headcount
against sliding fees that parts of the agency world could contract by up
to 20 per cent in the year ahead. The data confirms that three-quarters
of firms saw profits dip in 2001. And most worrying of all is the claim
that up to one in three UK PR firms are trading at a loss.
There were wags who answered the question 'will the downturn be U-shaped
or V-shaped?' with the quip, 'it will be bath-shaped'. But the latest
data offers material to overcome that defeatism. Overall, the figures
point to single-digit industry growth in 2002, even though much of this
will likely come in quarters three and four. And several hundred firms
have continued to grow, putting on up to 30 per cent in fees despite a
shrinking market. When marketing services emerge from their current
mire, they will be the winners.