Broadcast sector to suffer from credit squeeze?

chris

Any hope that the decline in the global economy has been halted by the frantic efforts over recent months of governments and central banks appears to have evaporated.

This past weekend’s collapse of the Carlyle Capital Corporation hedge fund, a last-ditch rescue of respected Wall Street bank Bear Stearns and the UK Chancellor of the Exchequer Alistair Darling reducing his economic growth forecast from two to three per cent for the year to 1.75 to 2.25 percent, has not helped the situation.

The broadcast market could take some cheer, however, from the latest Industry Index by the IABM (International Association of Broadcasting Manufacturers), which records continued growth, despite being down on the high point recorded in the autumn of 2007.

The data is collected from a survey of IABM members around the world, with 71 companies responding. According to the most recent Index, sales have rise 11.9% year-on-year but there are signs that the broadcast manufacturing market is "softening".

The newly appointed chief executive of the IABM, Roger Stanwell, said: "We are pleased to see that the sector is still buoyant despite the current financial climate." This latest survey was overseen by Stanwell's predecessor, Roger Crumpton, who observed: "The financial climate is difficult and the Chancellor lowered his forecast for growth from nearly three per cent to around two per cent and broadcast equipment sales have fallen from 16% to 11%. We have to question whether there will be any economic impact on the broadcasting sector as it is so detached from the general economy."

Crumpton said that although the UK’s ITV group was having a hard time the capital projects that began at the end of last year would run for a year to 18 months and would account for a high number of sales, with three major BBC tenders also due to be announced soon.

American companies were among the respondents to the survey and Crumpton said they were reporting improved profitability. "Because of the low rate of the dollar, customers in places like Dubai now want to do business in that currency rather than euros or sterling. That will keep American companies competitive and may bring about a pull-through and strengthen the dollar."

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