By: Lucia Moses Citing weak job growth and economic risks including war, terrorism, and rising federal and private debt, newspaper economist and consultant Miles E. Groves lowered his forecast for 2003 newspaper ad spending but raised his outlook for 2004.
In the Sept. 15 edition of his quarterly newsletter,
Economic Notes, Groves predicted a 3% gain in ad spending for the year, with national rising 8.5%, retail growing 3.4%, and classified adding 0.2%.
The downward revision for 2003 is Groves' second this year. In July, he looked for newspaper ad spending growth of 3.1% this year, down slightly from his March forecast of 3.2%, when he predicted a post-war upturn.
For 2004, Groves predicted 4.7% growth in newspaper ad spending, with national increasing 5.5%, retail gaining 4.7%, and classified advancing 4.4%. In July, he forecast 4.4% in total newspaper ad spending growth.
Groves' current forecast assumes auto and real-estate advertising will continue to drive classified revenue growth next year.
Groves, whose forecasts tend to be bullish, wrote that long-term, increased business investment, shrinking labor force, and retiring boomers bode well for recruitment advertising demand. For the year ahead, though, he wrote that favorable year-over-year comparisons with 2003, rather than real growth, will drive help-wanted numbers.
Groves earlier this year left The Barry Group consultancy, a former Atex Media Command (AMC) subsidiary, where he was chief economist. He is now president of Baltimore-based MG Strategic Research Ltd., a marketing practice focused on media economics.
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