Global IR budgets fall to 2014 levels

Feb 21, 2017
<p>Budget resources decrease in Europe and Asia but rise in North America</p>

Global IR budgets fell by $45,000 to $446,000 in 2016, back to similar levels seen in 2014, according to the IR Magazine Global Investor Relations Practice Report 2016.

IR budget drops are largely concentrated in Europe and Asia, while North American budgets have risen by $70,000 to $577,000.

North American companies spend on average more than $200,000 on outsourcing, while Asian companies spend less than $50,000. The large increase in North American budgets is more than matched by the reduction in Europe, where the average IR budget has fallen by $95,000 to $431,000.

The highest IR budgets are found at European mega-cap companies, where they average $2.06 mn. Lowest budgets are found at Asian mid-caps, where teams have an average of $142,000 to play with.

Global IR teams typically spend 30 cents of every budget dollar on external IR services, with small-cap IR teams spending more than a third and mega-caps just a quarter of their IR budgets on outsourced services.

Europe is the region where budgets most closely match the global average. Far behind is Asia, where a drop of $50,000 sees the 2016 average IR budget come in at $227,000.

Generally speaking, the larger a company’s market cap, the larger its likely budget for IR. But the gap between budgets for the smallest and largest companies has contracted this year because budgets have fallen at mega, large and mid-cap companies but increased at small caps.

Globally, mega-cap IR budgets are more than $1 mn for the second year in a row, though they have dropped by $262,000 this year to just under $1.2 mn. Large-cap companies see a drop of $96,000 to $551,000 and mid-cap companies see a small drop of $14,000 to $341,000. A modest increase in IR budgets is found at small-cap firms, with the average budget here rising $15,000 to $224,000.

While the fall in IR budgets has been relatively small, the story over the past few years has been one of consistent decline. Since 2011 mid-cap IR budgets have fallen every year and, while these year-on-year drops have not been dramatic, collectively they have resulted in 25 percent being shaved off the IR budget for mid-caps over the past five years, down from $453,000 in 2011. 

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