Unless you’ve been in a cave the past two weeks, then you know things aren’t looking too good right now for the economy. It’s yo-yoing like crazy, which has investors, CEOs and entrepreneurs fretting.

Friday’s Wall Street Journal reported that America’s entrepreneur class shrunk during the Great Recession (despite predictions that it was rapidly growing because so many people were out of work). And The Financial Times reported that business leaders’ confidence in their industries and the global economy has deteriorated sharply.

But how well is PR holding up throughout this fracas?

I was asked this question last week by PRDaily. The reporter wanted to get my sense — as an advocate for PR through my work at PRSA — for what impact, if any, the current economic struggles are having on the U.S. and global public relations industry.

Before I get into some fuller commentary, let me couch all of this with a couple of caveats:

First, as regular PRBC readers know, I have been bullish when it comes to PR’s growth prospects in 2011 and beyond. Various agency revenue reports and industry growth projections have shown thus, and I have little reason to think things will take a dramatic downturn, despite the current economic worries.

Second, I’m also a realist. I know full well that much of our work and our industry’s revenues are predicated on clients’ needing our services. And, unfortunately, PR services and other forms or marketing are often axed early when businesses begin to struggle financially.

Having said that, here’s what I told PRDaily:

What are you hearing from your members about the stock slide in terms of their clients considering pulling back on PR budgets?

So far, like much of the country, our members seem to be in a wait-and-see mode in terms of how the stock market slide will impact their work and client budgets. Given that we represent public relations professionals, rather than public relations agencies, it’s a little different for our members’ perspective. Many of them are firm owners, so the market slide will obviously have some impact on their revenues and strategic planning. On the whole, though, it’s still a little early for anyone to make long-term projections for how this most recent slide will impact business.

Why is PR important during economic downturns?

Any good business leader will tell you that the companies that come out quickest and more robust in terms of revenue growth and sustainability following an economic downturn are those that invest during the shaky parts of the economy. It seems counterintuitive, but it is often the businesses that retreat with their strategic planning, marketing and PR that fare worse coming out of a downturn.

Has there been a rebound this year, at least until this week, in PR in terms of expanding budget?

Absolutely. The 2011 World Report from the International Communications Consultancy Organisation (ICCO) showed that the world’s two largest markets for public relations — the U.S. and the U.K. — both rebounded from a five-percent decline in fee income in 2009 to record a double-digit recovery in 2010. U.S. consultancies posted an average 11-percent increase in overall fee revenue, while the U.K. saw a 13-percent increase. Both also saw improvements to profitability; the U.K. by an average of 30 percent.

How do you think the faltering economy will impact the PR industry?

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