Advertising giant WPP said a rapid recovery in China hinted at a possible snapback in UK activity on Wednesday as it reported a slump in first-quarter sales.
With new coronavirus cases starting to fall, attention in business circles has shifted to the shape of the economic recovery, with debate whether the West will see V-shaped or U-shaped recovery.
WPP said signs from China, the epicentre of the crisis, were encouraging as the country was “emerging through the other side” with more activity.
Around 90% of WPP’s 9000 China staff are back in the office now after nearly all were sent home to work in January when the outbreak emerged.
WPP chief Mark Read said China’s experience was encouraging for the UK, although the situation would remain tough in the months ahead.
“It’s too early to say how things will develop but we’re reassured by how China came back,” he said. “We do see a gradual easing of the lockdown which may mitigate some of the economic impacts.”
While the long-term outlook may be brighter, the immediate hit to WPP has been stark.
The owner of Wunderman Thompson and Finsbury said first quarter net sales to the end of March fell by 3.3% to £2.4 billion, with sales in March down 8% alone.
The company has made some redundancies and Read said: “We can’t rule out further job cuts.”
