LONDON: Adspend levels in the UK declined for the first time in more than a year during the second quarter of 2011, according to the latest AA/Warc Expenditure Report.

The Expenditure Report, which can be browsed by subscribers here, revealed advertising revenues fell by 1.1% year on year in Q2 2011, at current prices.

Alongside the tough fiscal climate, challenging labour market and negative consumer sentiment, this was at least partly attributable to the fact that Q2 2010 delivered growth of 11.9%.

Suzy Young, Warc's data editor, said: "While adspend did contract year-on-year in the latest quarter, it's worth remembering that Q2 2010 yielded a particularly strong result, making comparisons particularly unfavourable."

More specifically, television ad sales dropped by 2.2% in the second quarter of 2011 and press saw a 7.7% decrease, offsetting gains of 7.3% for radio, 6.4% for the web and 2% for direct mail.

Looking ahead, the Expenditure Report predicted the UK ad market will rebound in the second half of 2011, as returns climb by 1.3% and 1.7% in the third and fourth quarters respectively.

Despite this, the full-year forecast has been downgraded, with annual growth now pegged at 0.9%, measured against an expansion of 1.4% outlined by the last such study, published in June.

Taking a longer term view, the Expenditure Report projected that ad revenues would increase by 4.6% in 2012, again off from the figure of 5.4% suggested in June, but still a significant improvement, not least thanks to the London Olympics.

Tim Lefroy, chief executive of the Advertising Association, said: "Advertising is particularly prone to the bigger economic picture and while times remain tough, there are some grounds for optimism as we move towards 2012."

Breaking out spending expectations for individual sectors, retailers and the government are anticipated to witness mutual declines this year but bounce back next year. All other industries are set to record growth over both periods.

Elsewhere, display is due to experience hardening demand this year and next. Classifieds should be flat in 2011 before budgets rise in 2012, boosted by non-recruitment categories including online search.

The Expenditure Report covers actual adspend levels for print, TV, digital, cinema and out-of-home, as well as providing forecast data for the coming 24 months.

Data sourced from Warc