No sign of a downturn in PR

PR Week reports today that Chime Communications, Huntsworth and Havas have all reported an outstanding 2007 in their annual figures, with no downturn apparent so far in 2008.

But despite the positive outlook of many of the large groups, some industry watchers believe a sharp downturn is imminent.

"The PR industry is sticking its head in the sand if it thinks the outlook for the UK economy is optimistic," said Chatsworth Communications founder Nick Murray-Leslie.

This goes against the figures that PR Week reports, the most interesting view being that the number of groups predicting a PR downturn in 2008 is zero.

Lord Bell, Chairman of Chime Communications, gave his view:

"We are in an odd situation right now. Everything seems to be fine, even though we are being told it is not. The level of business at the start of this year indicated no sign of downturn - maybe it just hasn't arrived yet.

It is important to remember that this is not a normal economic cycle; something structural has gone wrong to cause the sub-prime crisis, but this does not necessarily mean business is slowing down.

There is a lack of confidence in the marketplace. Share prices are low, meaning acquisitions are unlikely. There's a kind of constipation in our sector in that respect. But anyone who reads share prices as an indication of how well business is doing is a fool. They are a reflection of market sentiment rather than figures. The market has the jitters but PR is actually performing very well.

Obviously, costs need to be controlled at this time in case there is a downturn, because it is perfectly possible that there will be. But, at the moment, it just seems as though only America has pneumonia."

Many people believe that PR is unaffected by the global credit crunch because when the "market has the jitters", as Lord Bell puts it, companies call on PR for crisis communications and to retain their brand's reputation.

Yet although Lord Bell points out that only America has pneumonia, it may be only a matter of time before it spreads across the Atlantic and affects the UK's PR industry.