Media investment group GroupM has released updated investment forecasts for 2018 and 2019, downgrading both from previous predictions. The firm’s 2018 growth expectations have been reduced from 4.5 percent to 4.3 percent. 2019 growth projections also decreased from 3.9 percent to 3.6 percent, with total new investment anticipated to reach $19 billion instead of the $23 billion earlier predicted.

GroupM notes that recent U.S. dollar appreciation versus just about every other currency has helped suppress this growth. Also, stress on the auto category stood out in feedback received from its worldwide network, as did the absence of any rebound in consumer-packaged goods investment with traditional media. These views and more are discussed in This Year, Next Year, GroupM’s twice yearly look at worldwide media investment trends written by Futures Director Adam Smith.

“GroupM’s still strong but slightly fraying 2018 view ties to macro questions: tighter money, China’s slowing growth and the potential for pricey trade wars,” says Smith. “Real interest rates are edging up globally, but serious potential problems remain limited to a fragile five—Argentina, South Africa, Brazil, Turkey and Venezuela.”

PPAI’s own observations of the promotional products market also point to a slow-down in industry sales growth in early 2019. Looking ahead, the PPAI/ITR Economics third-quarter 2018 Market Outlook Report expects supplier growth to rise into the second half of 2019, before a brief, mild decline takes hold into early 2020—ITR projects supplier growth of 2.6 percent in 2019 compared to six percent in 2018—while distributors are expected to show growth of 5.6 percent in 2018 before slowing to 2.5 percent in 2019.

China remains the largest contributor to growth says the GroupM report, but 2019 will be its sixth successive year with single-digit ad growth and mark its lowest growth rate yet recorded. Still, its $90 billion ad market is second only to the U.S. and has doubled since 2010. Despite rapid consumerization, China’s advertising intensity peaked at 0.78 percent of GDP in 2006 and has trended down to a prospective 0.67 percent in 2019.

Ranked second, the U.S. is experiencing good macroeconomic indicators like lower unemployment and improved consumer confidence, but increasing energy prices, rising interest rates and low unemployment have many concerned about the potential for increased inflation on top of a yawning deficit. Marketers continue to scrutinize digital investment with emphasis on verification and value.

Ranked third, India is expected to contribute $1.35 billion of growth. This is roughly the same as Australia’s, Russia’s and Brazil’s combined growth, even though India’s total ad economy is a quarter of the others’ combined heft. India’s 14 percent ad investment growth is rooted in seven percent real consumer spending growth.

Japan is fourth. Japanese advertising has tracked ahead of its GDP over the past decade with media spending per capita rising sharply since 2016. The 2020 Olympics and a surge in biddable media are powering tailwinds, but a 2019 consumption tax rise from eight percent to 10 percent and Japan’s belated confrontation with value, viewability and verification in digital supply chain are foreseeable headwinds.

The UK is fifth. Despite fears of Brexit calamity and consumer fatigue, advertising investment remains propelled by massive advertising digitization—61 percent of predicted investment in 2019. GroupM’s UK forecast remains buoyant partly due to the market’s characteristic flexibility. In an emergency, advertisers know they can turn off the tape.

Concerning the new forecast, GroupM’s CEO Kelly Clark says, “Worldwide advertising investment grows slowly but marketing has never moved faster. Automation proliferates, cycles accelerate, talent grows more mobile. The gap between the cost of failure and the value of success grows wider. For advertisers, this underscores the importance of a world view and trusted partners who can help their brands perform where the growth can be found.”