Market Research Grows 2.6% in UK

Figures released this week by the British Market Research Association indicate that expenditure on market research in the UK grew by 2.6% in 2002, to a value of £1.18 billion.

Domestic sales grew slightly less than international sales: they posted a 2.3 per cent increase to £884m, compared with a 3.5 per cent increase for international research to a value of £292m.

'Although this growth level is still slightly higher than inflation, this is the first evidence we have seen that market research growth is starting to slow down, in line with other marketing disciplines,' comments Peter Jackling, chairman of BMRA. 'A sales growth of 2.6 per cent for our members last year compares with 7.1 per cent in 2001, when turnover reached £1.15 billion. Notwithstanding, market research has been one of the least affected elements of the marketing mix. Advertising has had a couple of bad years as expenditure has slowed up as a result of the economic downturn. We know that advertising spend fell by 3 per cent last year as TV ad revenues dried up, and the public relations industry also suffered a decline of up to 11 per cent.'

Mr Jackling continued 'We have seen a slightly smaller growth rate for domestic research, which is an indication that the UK industry is taking the brunt of economic caution. Our figures are understood to be in line with those yet to be reported in other European countries and the USA. We are heartened by the news that the majority of the Top 20 market research agencies in the UK posted an increased turnover, with some companies growing at significant rates. Our biggest member, Taylor Nelson Sofres, did show a downturn, which is primarily attributable to the ending of the BARB contract at the close of 2001.'

'In terms of sector, while the full breakdown is not yet available, we are experiencing a rise in expenditure in the public sector. There are several reasons for the increasingly competitive nature of this arena, and in Central Government at least, the amount expended on research is growing, and the budgetary constraints are less severe.'

'In Local Government, and in other areas, new statutory requirements have increased the volume of work, which means the need for public sector research is growing while other parts of the economy are slowing down. Advertising research, for example, has been badly hit by the post-September 11 downturn in confidence, which may be encouraging some researchers to widen their remit into the public sector.'

'We believe that there is even more of a need, in times of economic slowdown, to invest in market research, particularly in relation to projects of high financial value. The sector remains stable, and the range of services our members can offer continues to grow and meet customer needs. Looking to the future, we need to be cautious with our forecasting in an economic climate such as this one, particularly as prospects remain tight,' concluded Mr Jackling. 'However, those forward prospects suggest an ongoing plateau before we can expect to see renewed growth. We expect to benefit from an upturn in turnover perhaps later on this year, or in 2004.'

The industry size estimate is based on returns from BMRA members accounting for around 65% of the Association's turnover.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.