As we gear up for 2023, the ad industry must reset expectations. GroupM and Mediabrands have both reduced their forecasts for ad spending in 2023.

GroupM expects global ad spending to rise 5.9% next year. That’s down from the 6.4% GroupM estimated in June. Magna, a unit of Interpublic Group’s Mediabrands, also downgraded its 2023 predictions to 4.8% growth in 2023 to $833 billion, versus the 6.3% growth it had predicted in June.

Magna said 2022 growth will hit 6.6%, in part because of the boost in ad spending around the midterm elections in the U.S. That is down from the 9.2% growth Magna predicted in June.

The ad revenue forecasts come as most economists predict a recession in 2023. But recession indicators like high unemployment (the unemployment rate in November was 3.7%) remain absent.

But inflation remains a factor as well. The rise in consumer prices hit a 40-year high of 9.1% in June and have since cooled off a bit, but companies forecast that they’ll raise salaries by 4.6% next year.

The mixed economic outlook is prompting many companies to cut back on ad spending. For instance, a survey in the U.K. found that more than two-thirds of the UK’s biggest advertisers plan to cut back on traditional TV next year.

GroupM expects global ad spending to rise 5.9% next year. That’s down from the 6.4% GroupM estimated in June.