The latest expenditure report has downgraded the forecast for 2021 to a return-to-growth of 14.4%, compared with the 16.6% predicted in July.

Spend on advertising is set to fall by 14.5% to £21.5bn this year as a result of Covid-19, which would equate to a loss of £3.6bn compared with the £25.3bn spent in 2019.

The latest forecast for 2021 means the advertising market is now not expected to recover fully until 2022. 

Additionally, spend in the fourth quarter of the year is expected to drop by 10.5% to £6.2bn – £724m lower than last year.

During the national lockdown restrictions in the spring, spend fell by 33.8% in the second quarter, resulting in the lowest quarterly spend recorded by the AA/Warc and contributing to a 14.9% dip over the first half of the year.

Stephen Woodford, chief executive, Advertising Association, said: “Events of recent weeks have shown this will be no straightforward recovery as different parts of our country enter or leave local conditions at varying speeds. We must boost growth and support jobs through an advertising tax credit and a skills programme to aid colleagues facing unemployment. It is essential that our workforce, business, and government work together on the recovery plan for our industry and our country.”

James McDonald, head of data content, Warc, added: “Advertising trade remains depressed, and the rising likelihood of sustained localised lockdowns over the winter, a disorderly exit from the European Union in December, and a prolonged economic recovery embodied by rising unemployment, now leads us to believe that the industry will not fully recoup this year’s losses until 2022.”