The Bellwether Confidence Index

Confidence at two-year high as profits and budgets climb again.

Optimism among marketers about the financial prospects of their companies and their industries was at its highest level for two years in the last quarter of 2006, according to the Institute of Practitioners in Advertising (IPA) Bellwether Confidence Index. The data, which is exclusive to Marketing Week, shows an increase in optimism since the third quarter of 2006, with the difference between the optimists and pessimists at its lowest level since the study started in spring 2005.

The findings indicate that renewed confidence among marketers is being driven by a number of factors, including record corporate profitability in the UK, which reflect strong sales. Other factors include oil price stabilisation and strong economic growth in the UK’s main export market, the Eurozone.

Marketers are also more upbeat about the financial prospects of their industries. The number of marketers who are predicting a weakening of prospects has fallen to just 4%.

But despite this, only 22% of respondents reported that their industry’s financial prospects had materially improved over the past three months and 27% say the situation has deteriorated.

The quarterly Bellwether report, conducted by NTC Economics, asked the panel an additional question about the prospects of their own company and industry as a whole.

The panel comprises 250 UK firms, structured according to industry contribution to GDP. The study, which analyses UK marketing spend, also revealed that budgets for the 2007-08 financial year are up an average of 45% on 2006, the most buoyant level for seven years.

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