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New business grows but industry remains cautious

LONDON - An upturn of fortunes in the direct marketing industry is on its way, along with an increase in new business, but confidence in the industry remains fragile, according to new research from the DMA.

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The latest Industry Trends Survey, conducted in the second quarter of 2003, found that the number of companies reporting an increase in new business had risen to 26% from 23% in the first quarter of the year.

However, despite this growth in new business, only 42% of companies who took part said they saw an improvement in the market compared with the second quarter 2002. This compares with 57% of respondents who said it was better in the first quarter.

This could suggest that while there is more new business around, advertisers' budgets remain tight, and DM suppliers are having to offer more for less.

As many as 47% of respondents said that they thought that business was looking better than it was three months ago, indicating that the market is moving into recovery mode.

The mood from the data industry was also upbeat, with as many as 75% of companies in this area reporting either the same or better business. Financial services and mailing houses were less gung ho, reporting a fall in business over the last three months.

Simon Davis, managing director of e-crmdata and member of the DMA Business-to-Business Committee, said: "It is clear that the industry as a whole has gone through a very difficult first two quarters in 2003, but from our findings and those of other, more generalised business trends surveys, we expect the next survey to be much more positive."

He added: "This survey is key to showing how the DM industry is performing within a changing economic climate and hopefully provides market intelligence to allow DM practitioners to plan and forecast more accurately."

The survey is conducted quarterly and covers all aspects of the direct marketing industry. It aims to uncover broad trends and identify the levels of staffing and new-business activity within each sector.

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