After rebounding in to positive year-on-year comparisons in 2002's third quarter, the NAA says the trend should continue with the fourth quarter and into 2003.
Writing in "The Overhang of Uncertainty," a 2003 forecast, Jim Conaghan, NAA vice-president of business analysis and research, said that conditions are recovering quicker during this downturn than they did during the last one.
"The advertising recovery currently under way means that although spending declined sharply in 2001, conditions are improving a little more rapidly than they did in the last downturn in 1990-1991. Performance in 2003 should be better, albeit with the overhang of uncertainty," Conaghan wrote.
In November, The New York Times Company said its October advertising revenues rose by almost 4%, boosted by a strong performance at its flagship newspaper the New York Times and giving cause for further optimism in the US market.
The group's New England Newspaper group, which publishes the Boston Globe, saw advertising revenues rise 1.8%, while its regional newspaper group saw revenues jump 4.3% as a result of political advertising to support the mid-term elections.
At the same time, New York-based rival The Wall Street Journal cut as many as 31 jobs, as part of Dow Jones's ongoing efforts to cut costs, amounting to 5% of the paper's staff. The cuts came as the financial news group continued to suffer in the face of the advertising downturn, which has hit the financial sector particularly hard.
According to the NAA's Conaghan, the difference between the more conservative 3.2% and the 6.1% is partly due to the uncertainty of a second Gulf War and the problems of forecasting consumers' spending patterns and businesses' willingness to invest and expand in the coming year.
The 3.2% envisions a weaker consumer marketplace, with advertising roughly flat. This scenario also forecasts the steam running out of the housing boom and automobile markets and a flat recruitment market, which translates into small gains for classified advertising.
The more optimistic estimate of 6.1% is buoyed by a more rapidly improving job market, but still with a weakened housing and car advertising market. The 6.1% rise would also be contingent on recruitment advertising returning to positive territory helping the classified sector bounce back.
"The newspaper industry faced some tough economic challenges over the past couple of years as the overall economy dipped," NAA president and CEO John Sturm said. "However, as a whole, newspapers made the proper adjustments given the business climate, and now stand in a solid position as the industry starts to see signs of an economic recovery."
The NAA represents the $55bn newspaper industry and more than 2,000 newspapers in the US and Canada. Most NAA members are daily newspapers, accounting for 87% of the US daily circulation.
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