The news story is not what it used to be. For years, local newspapers were the darlings of investors, their high margins and monopoly status making them attractive to the City and private equity firms. But in the past six months, it is the supposedly-in-decline national newspapers that have proved to be far more resilient — a trend that shows every sign of continuing.

The Independent began the year with advertising growing — despite the talk of an economic downturn — yet Johnston Press, home to The Scotsman, saw its advertising revenues fall 4.2 per cent.

National newspapers owned by Daily Mail and General Trust, the owners of the mid-market tabloid, have seen advertising revenues 4 per cent ahead this year; its regional newspapers, by contrast, began 2008 down by at least 2 per cent. Gannett's UK titles, gave up 6.5 per cent in the last quarter of 2007.

Regional newspapers are more vulnerable to an economic downturn and a shift in advertising online, observers say. By contrast, on national newspapers, there is talk of “record weeks” of healthy display advertising, helped as titles migrate to colour.

Jonathan Barnard, head of publications at media buying agency Publicis, said while regional publishers have held back on investment, publishers of national newspapers have been boosting colour pages. “There was a 12 per cent increase in colour advertising in the nationals in January,” he said. Key advertisers for national newspapers — principally high street retailers — are also holding steady.

Gavin O'Reilly, the chief operating officer of Independent News & Media, the owner of The Independent, said: “Display advertising in the UK is performing pretty well. Retailers are trying to ensure there isn't a recession, by putting advertising behind their brands.”

Regional titles rely heavily on classified advertising, which is most vulnerable to online migration, whether to Google, or leading recruitment websites, such as Jobsite, AutoTrader for cars, and Rightmove for property. By contrast, display advertising, which predominates in national newspapers, has been slow to develop online, with YouTube struggling to win over rich media advertising, and Yahoo! growing slowly.

Adding to the downturn for the regionals is that fact that property, recruitment and car buying are the first sectors to go when the economy softens. “The regional press has become much more vulnerable than nationals to a slowing property market. A lot of people buy regionals for the property pages and they are receiving a lot less money from a significant decrease in classifieds,” Mr Barnard said.

Some believe that as consumers become increasingly comfortable online, that should benefit national newspapers, as companies continue to invest in strong brands. Some carmakers, such as Jaguar, have returned with strong campaigns, an effect that will be further boosted by the summer's European Championships, despite England's failure to qualify.

Paul Zwillenberg, head of media with OC&C Strategy Consultants, said: “You have to look at advertisers' campaign objectives. National newspapers still deliver a big impact with a mass audience, and there are times when an advertiser simply wants to get people into their shop or forecourt, just to buy something, rather than a specific product identified online.”

The question, though, is whether the divergence in performance between national and regional titles is short or long term. Observers believe that regional titles will see margins drop from 30-plus percent to below 20 per cent, and the frequency of publication will inevitably drop.

But national newspapers could still be hit by a commercial downturn. Classified advertising remains significant for nationals — amounting, perhaps, for a fifth of revenues — while the amount of late sign-offs is up markedly. Media buyers, such as Aegis, insist that bookings by its clients are not being pulled, but a rise in late approvals is the first thing that happens in a downturn. The reality may be that no title in Britain is immune to a recession.

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