According to the study, which was commissioned by the Association of Publishing Agencies (APA) and sponsored by DHL, customer publishing will defy the recession to grow from £904m to £1.1bn by 2012.

One customer publisher said: There are obviously issues over marketing spend, which will impact the industry. However, clients are realising that customer publishing is more effective than other channels, meaning that with good editorial ideas and brand understanding, the industry should continue to grow.

APA chief operating officer Julia Hutchison added: This latest report represents a positive marker for everyone involved in the customer publishing industry in the face of the current climate.

While the overall media outlook is gloomy, the huge growth that our industry has experienced since the last industry research has placed the medium in a very strong position.

The report found that print remained the main format for customer publishers, accounting for 75% of the total spend, or £678m, although this was significantly down on the previous study three years ago, when print made up 90% of the total.

In addition, the report revealed that new client spend on printed publications was the top growth area over the past two years and was expected to remain top for the next two years, although increased digital spend by existing clients is expected to outpace increased print spend to take second spot by 2010.

The industry has also successfully reduced its reliance on advertising revenues following a shift in focus, which led advertising turnover to drop from 39% of the total customer publishing turnover in 2004, to 19% today.