Europe’s advertising and marketing industry has started 2016 riding a moderate wave of business confidence, following a fourth quarter of 2015 which saw the business confidence index partially reverse the decline of the July to September period, according to a report released today by the European Association of Communications Agencies. This rise in business confidence comes despite the prospect of a year that will see some crucial events for the fragile European economic recovery, such as the migrant crisis and UK referendum on EU membership.
The European Advertising Business Climate Index, based on monthly data collected from advertising and market research companies across the EU for the European Commission (DG ECOFIN), indicates a rise in levels of business confidence in the advertising and marketing sector with its business confidence index rising from +5 to +11 (from October 2015 to January 2016) as an average across EU member states.
There are significant variations at regional and national level. Business confidence in advertising and marketing is lowest in Greece (-14), followed by Estonia (-6) and Belgium (-4). France, one of the largest European advertising markets, also has low business confidence (-2) but improved from October when it scored -8. Conversely, confidence is highest in Malta (+62), Slovenia (+32) and Romania (+28). The confidence of the UK market has also grown significantly from -10.7 in October 2015 to +9.2 in January 2016.
Demand for advertising services slightly increased from +5 to +8 from October 2015 to January 2016, with the cautious upward trend also reflected in demand expectations rising from +10 for Q4/2015 to +12 for Q1/2016. The advertising industry has, however, experienced a moderately downward trend in employment evolution in Q4/2015 falling from +13 to +11. However, employment expectations have risen from 0, for Q4/2015, to +3 for Q1/2016. Advertising companies from Western and Northern Europe are less optimistic regarding the demand for their services falling to +7 and +21, from +10 and +33 points, respectively. Companies from Mediterranean Europe expressed the highest expectations for Q1/2016, registering +18 points, significantly up from +5 points for Q4/2015, despite Greece’s negative score of -13.
When asked how they expect their firms’ employment to change over the next three months, companies in Western, Central/Eastern and Northern Europe were more positive; expectations increased from +1, +5 and +8 in October 2015 to +5, +7 and +10 in January 2016, respectively. Mediterranean Europe was less positive than in October (expectation decreased from +4 to +3).
The UK advertising and marketing companies were much more optimistic about future employment scoring +20 in January 2016 in comparison to -12 in October last year. Conversely, German companies have much lower expectations than in October falling from +28 to +6 in January 2016.
EACA will publish the next edition of the European Advertising Business Climate beginning of May.