Olympian Effort Required as WPP Warns of Tough Times; the Olympics Helped Ad Spend
Byline: Amy Wilson
INDUSTRY bellwether WPP still believes Britain will dodge a recession.
But chief executive Sir Martin Sorrell warned that 2009 will be a tough year despite positive half-year results.
He predicted an Olympic hangover with a slowdown in China and soaring energy prices hitting western European and US economies.
But WPP has been shielded from the slowdown by advertising linked to the Olympics and the US presidential race.
First-half profits rose from ?294.1m to ?338.5m and sales increased from ?2.92bn to ?3.34bn, boosted by demand in Asia and South America.
However, underlying sales in Britain, western Europe and the US slowed in the second quarter, hit by market turmoil.
Sorrell said that 2009 could also be made more difficult by the arrival of a new US president, because the leader will have to tackle the budget deficit by raising taxes or cutting spending. Both would set back the fragile economy.
'The prospects for 2009 remain less certain particularly if the US and Western European economies continue to be impacted by the financial crisis,' he said. He also did not believe China would be immune to the effects of a US slowdown because the stillbooming economy will have to deal with higher food prices. …