US slowdown rattles Asia's agencies

<p>Agencies in Asia-Pacific are bracing themselves for a possible </p><p>fallout as the US economy appears to be grinding to a halt. </p><p><BR><BR> </p><p>According to figures provided by ACNielsen and MindShare, the level of </p><p>adspend in 2000 was higher than for the year before, indicating that the </p><p>late '90s Asian financial crisis was well and truly over. </p><p><BR><BR> </p><p>However, estimates this year are decidedly more conservative, taking </p><p>into account a possible downturn in the US. </p><p><BR><BR> </p><p>Underlining the more conservative mood, growth estimates for China have </p><p>been placed at 20 per cent compared with 60 per cent last year. </p><p><BR><BR> </p><p>MindShare regional business director Chris Walton said that if the </p><p>American economy slowed significantly, it could have a knock-on effect </p><p>on Malaysia, Hong Kong, Singapore and Taiwan. </p><p><BR><BR> </p><p>However, he said the jury was still out over what would actually </p><p>happen. </p><p><BR><BR> </p><p>"The debate is still on-going as to whether the US will go into a </p><p>recession or if it's going to be a soft-landing," Mr Walton said. </p><p><BR><BR> </p><p>Grey Worldwide Asia-Pacific president Eric Rosenkranz said a recession </p><p>or a soft landing could mean the same thing for the region's advertising </p><p>industry because the issue in the US was not unemployment but consumer </p><p>confidence. </p><p><BR><BR> </p><p>"If it's a full-blown recession, Americans will cut back on their </p><p>spending. </p><p><BR><BR> </p><p>If it's a soft-landing, they'll still cut back on spending because </p><p>although they have a job, their savings are down and their stock </p><p>portfolio is sharply down compared with this time last year. </p><p><BR><BR> </p><p>"And what are they going to cut back on? They'll cut back on computers, </p><p>electronics, toys and textiles, all of which are major industry </p><p>categories in Asia." </p><p><BR><BR> </p><p>Mr Rosenkranz said that although he was forecasting Grey to turn in </p><p>another record year, precautionary measures have been implemented. </p><p><BR><BR> </p><p>"I have advised our people to watch their budgets closely and be </p><p>sensitive to economic indicators and to watch hirings because really </p><p>this is not the time to be taking on new staff," he said. </p><p><BR><BR> </p><p>Worldwide agency heads said they too were cautious about their prospects </p><p>for this year. </p><p><BR><BR> </p><p>Mr Miles Colebrook, JWT International group president, said: "Worldwide </p><p>we remain cautiously optimistic. The US and Europe have slowed from the </p><p>heady heights of 2000 but the outlook remains strong." </p><p><BR><BR> </p><p>WPP, which is JWT's parent, saw pre-tax profits for 2000 soar 43 per </p><p>cent to pounds 366 million, however it predicted slower growth for </p><p>2001. </p><p><BR><BR> </p><p>"2001 has been ushered in with a multitude of gloomy </p><p>prognostications. </p><p><BR><BR> </p><p>Some may prove to be justified. But early indications are that the </p><p>worldwide growth of advertising expenditure will be around five to six </p><p>per cent," a statement said. </p><p><BR><BR> </p><p>Asia-Pacific Adspend (1996-2001) </p><p>All in local currencies (000s) </p><p>Country 1996 1997 1998 1999 </p><p>Japan (Yen) 5,769,900,000 5,990,100,000 5,759,700,000 5,586,909,000 </p><p>Australia </p><p>(Adollars ) 4,832,711 4,989,548 5,263,040 5,612,738 </p><p>China (RMB) 27,229,000 35,899,000 44,244,482 50,776,000 </p><p>Hong Kong </p><p>(HKdollars ) 16,986,411 20,399,872 20,802,737 20,261,866 </p><p>Indonesia (RP) 4,140,000,000 5,094,000,000 3,757,000,000 5,612,000,000 </p><p>Korea (Won) 4,821,909,690 4,857,487,388 3,625,697,389 3,806,982,258 </p><p>Malaysia (Rg) 2,413,473 2,614,366 2,167,787 2,519,114 </p><p>New Zealand </p><p>(NZdollars ) 1,448,259 1,535,194 1,653,705 1,752,927 </p><p>Philippines </p><p>(Peso) 33,340.51 42,533.26 45,453.65 52,367.27 </p><p>Singapore </p><p>(Sdollars ) 1,137,465 1,275,187 1,186,390 1,219,916 </p><p>Taiwan </p><p>(NTdollars ) 41,094,072 48,585,565 61,876,144 59,338,716 </p><p>Thailand (Baht) 47,271,000 46,782,000 35,917,000 39,026,000 </p><p>Vietnam </p><p>(USdollars ) 66,622 82,680 85,160 85,757 </p><p>Country 2000 Est. % Change 2001 Est. % Change </p><p>Japan (Yen) 5,698,647,180 2.0 5,812,620,124 2.0 </p><p>Australia </p><p>(Adollars ) 6,624,662 18.0 6,306,472 -4.8 </p><p>China (RMB) 81,241,600 60.0 97,489,920 20.0 </p><p>Hong Kong </p><p>(HKdollars ) 23,301,146 15.0 25,165,238 8.0 </p><p>Indonesia (RP) 6,927,000,000 23.4 7,619,000,000 10.0 </p><p>Korea (Won) 4,263,820,129 12.0 4,775,478,545 12.0 </p><p>Malaysia (Rg) 3,157,332 25.3 3,512,597 11.3 </p><p>New Zealand </p><p>(NZdollars ) 1,774,308 1.2 1,818,666 2.5 </p><p>Philippines </p><p>(Peso) 55,172.68 5.4 55,172.68 0.0 </p><p>Singapore </p><p>(Sdollars ) 1,494,506 22.5 1,500,000 0.4 </p><p>Taiwan </p><p>(NTdollars ) 62,305,652 5.0 65,420,935 5.0 </p><p>Thailand (Baht) 47,600,000 22.0 53,445,000 12.3 </p><p>Vietnam </p><p>(USdollars ) 89,187 4.0 92,754 4.0 </p><p>Source: ACNielsen/MindShare Estimates. </p><p><BR><BR> </p>