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Advertising spend to fall as economic growth slows, predicts Zenith

singaporeAdvertising spend in Singapore is to drop by 5.6 per cent this year according to the latest predictions from Zenith.

The Publicis Groupe-owned media agency’s advertising expenditure forecasts for December anticipate a fall from $1.93 billion in 2015 to $1.83 billion in 2016, with weakness in both the economy and advertising investment expected to continue in 2017.

Growth in what Zenith classifies as ‘Advanced Asia’ – Australia, New Zealand, Hong Kong, Singapore and South Korea – is also expected to decline to 1.4 per cent for the year, down from 5.3 per cent in 2015. Both Australia and Singapore faced tough comparatives – Australia after an extremely strong year in 2015, and Singapore after its 50th birthday celebrations – while Hong Kong has suffered from a fall in shoppers visiting from mainland China.

“Singapore’s economic growth slowed sharply to 0.6 per cent in Q3 2016,” said the report from Zenith. “This comes on the back of the Singapore Government shaving its full-year growth forecast in August to between 1 per cent and 2 per cent, while Deputy Prime Minister Tharman Shanmugaratnam cautioned last month that the local economy would see growth come in at the lower end of the 1 per cent to 2 per cent range this year. The outlook for 2017 remains cautious with low growth projected.”

Despite the first half of 2016 defying economic pessimism in Singapore to stay fairly stable, “weakening economic fundamentals have seen tracked ad expenditure significantly reduced to reflect business sentiment”. The city-state is expected to return to growth of just 0.3 per cent in 2017 before accelerating again through 2018 and 2019.

Meanwhile, growth continues apace in ‘Fast-track Asia’ – China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam – even if the Chinese economy is slowing down after years of frenetic expansion. Although ad expenditure in Fast-track Asia is predicted to grow by 9.3 per cent in 2016 and at an average rate of 8.0 per cent a year between 2016 and 2019, that growth is down from 10.8 per cent a year for the previous five years.

In Thailand, adspend is expected to drop significantly, falling 9.6 per cent from $3.93 billion in 2015 to $3.55 billion in 2016.

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