(Reuters) - British companies spent 2.1 percent more on advertising last year, according to an industry forecast, after a strong fourth quarter, although spending on advertising is set to fall 0.7 percent in 2017 as Brexit uncertainties weigh.
The IPA Bellwether report, which is researched and published by IHS Markit on behalf of the Institute of Practitioners in Advertising, said it had revised up its 2016 forecast from a previous estimate for a rise of 1.9 percent.
It maintained its 2017 forecast, but raised its 2018 estimate to spending growth of 0.7 percent from a previous forecast of 0.2 percent
“With company sales growth being underpinned by firm UK household spending, marketing budgets continued to be driven higher in the fourth quarter of 2016 and a number of companies are seeking to maintain growth, with some taking advantage of the weak pound,” Paul Smith, senior economist at IHS Markit said.
Wednesday’s report said a net balance of 12.9 percent of companies increased their budgets during the fourth quarter of 2016, slightly lower than the 13.4 percent balance seen the previous quarter.
“However, with inflation set to rise in the coming months and erode purchasing power, plus the continued uncertainty created by the Brexit vote, it remains to be seen whether momentum can be sustained into the heart of 2017,” he added.
Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Alexandra Hudson