Letter from London: a year to remember
I will not be the first person to say that 2016 has been a year of seismic change.
Brexit, Trump, ISIS, greater levels of terrorism and ‘post-truth’ being named Word of The Year both sides of the Atlantic by the Oxford English Dictionary are some of the more visible outputs.
Basically, the World has gone mad.
So how is it coping?
Over the last twelve months, one or two of you will have spotted that we’ve been reporting from each of our offices on their local market perspectives. It’s now time for a rapid round-up of how some of the momentous changes in politics and the economy might impinge on the markets we operate in.
Let’s start in London.
To date little seems to have changed in the UK. But continued uncertainty of what we will do when we finally Brexit, and the reports of a significant deepening of debt by a further £112bn by 2021 and lower comparable earnings for many, does not augur well for a healthy economy – least of all for the Communications business. We all know what the first budget is to be cut when companies are looking for savings.
France: Upset about Brexit (but may have some sympathies behind the emotion shown) and heading for a presidential election. Looks like Francois Fillon, a right of Centre Conservative, may well be the man to slug it out with the National Front’s Le Pen – so we may be looking at a ‘Trexit’ (you heard it here first) upset there too with all that implies.
Germany: They too have a presidential election – but remain the Powerhouse of Europe – more so with the UK out of the way – but with all that industrial might may find export markets less keen to buy than before and they still have to come to terms with their immigration issues.
At least Switzerland is a banker – which is more than can be said for Poland which seems frozen in a stressful mix between EU politics and Russian presence in Ukraine which has had a massive impact on consumer confidence and as a result has stalled marketing confidence.
Perhaps not surprising, g being historically the most invaded Country in Europe – but at least they are not surrounded by active military action – unlike the UAE which, whilst remaining a safe haven for Middle Eastern wealth, has seen confidence decline significantly due to the dramatic fall in oil prices – which in turn has had a huge knock-on effect on the economy and, again, marketing confidence.
Further south in RSA, further political disruption, and a plummeting Rand means that this most successful of African Countries is looking more inward as its West African counterparts see active growth.
At least fortress Singapore looks out across a more positive market – even though the region is inevitably affected by the slow down of growth in China.
Whiffs of corruption and worries about the intentions of some of their neighbours may be omnipresent in Korea and Japan – but both nations seem to be able to develop a mentality which currently weathers most potential storms – but invariably will be affected by wider Global issues.
Which brings us to the US.
A bit like Brexit, the Trump appointment has yet to play out. Many hope the pre-election posturing and outrageous rhetoric will not come to pass. Whether it does, and to what extent remains to be seen. But either way, there will (again) be a period of uncertainty and that, combined with many Global Clients seeing detrimental signs in many markets, will invariably result in slow down of commitment to marketing funds.
Clients will continue to look for smarter, more cost effective ways to conduct their business. Agencies will need to organise themselves to deliver.
And hopefully, as 2017 unfolds, we’ll continue to be able to bring our Global learnings to the table to help that happen.
Stuart Pocock is Co-Founder & Managing Partner, The Observatory International