The latest Bellwether report, a quarterly survey of 300 senior marketers from the UK’s top companies and a respected barometer of confidence in the industry, says improved forecasts for the UK economy has left decision makers more confident about the prospects for their own companies and industries and more willing to loosen the purse strings.
Almost a quarter (22 per cent) revised their budgets up in the three months to 30 June, compared to 15 per cent cutting spend. The net balance of 7.3 per cent was up markedly on the 0.1 percent reported for the first three months of the year and the highest since the third quarter of 2007.
The balance of those planning a year on year increase in spend in 2013 matched the previous quarter’s 13.5 per cent.
Elsewhere, more than two-fifths (43 per cent) were more confident about the financial health of their own companies than in the previous quarter compared with 16 per cent more pessimistic. The net balance of 27.6 per cent up markedly on the 17 per cent reported for the first quarter.
Marketers also demonstrated increasing confidence in the prospects for the industries they operate in, the 6 per cent net balance a steep rise on the -11 per cent seen for the first three months of 2012.
The increasingly sanguine mood of those polled echoes the trickle of news signalling improvements in consumer confidence and the economy. UK retail sales grew 1.4 per cent in June, according to the British Retail Consortium following a 1.8 per cent gain in May, while reports of improved manufacturing output have prompted many economists to predict the UK economy is on the road to recovery.
Chris Williamson, chief economist at Markit and author of the Bellwether report, says the second quarter was one of the best since the 2008 financial crisis.
“The latest Bellwether survey shows companies taking an increasingly aggressive stance with regard to boosting their marketing expenditure, which in turn reflects their views on financial prospects having improved dramatically over the course of the year to date.
“With marketing spend a key barometer of the health of the economy, not only is GDP growth likely to have accelerated in the second quarter, but the Office for Budget Responsibility’s official forecast of 0.6 per cent economic growth this year is all of a sudden starting to look overly pessimistic.”
The Bellwether report comes in the same week Advertising Association/Warc data shows UK ad spend increased by 2.4 per cent in the first quarter of 2013 to £4.14bn.
Tim Lefroy, chief executive of the Advertising Association says the increase “reflects growing confidence” and “represents an important investment in the recovery”.