The death of the novel has been pronounced for more than a century, in a series that stretches back from Will Self through VS Naipaul as far as Jules Verne. But the latest rumblings of its demise, which come courtesy of a drop in fiction sales in 2018, have been comprehensively dismissed by the books world, with new books from Margaret Atwood and Philip Pullman expected to drive a return to growth this year.

The Publishers Association’s yearbook suggested this week that sales of fiction dropped in physical formats last year, down 7% to £359m. The fall was not offset by a 4% rise in digital fiction sales, to £229m, with overall fiction sales down 3% in 2018 to £588m.

By contrast, sales for non-fiction rose 1%, to £954m, with digital revenues up 10% and physical sales remaining level. The Publishers Association noted a “standout” performance from non-fiction, which it said had grown by almost 30% in the last five years, as well as the “phenomenal” growth of audiobooks, up 43% between 2017 and 2018.

Facebook Twitter Pinterest More materials … Philip Pullman, whose new novel is expected to lift sales. Photograph: Michael Leckie/AP

Stephen Lotinga, PA’s chief executive, said fiction sales had been in decline for a number of years – since 2014, total fiction sales have dropped by 4%. He added: “Out of all the books we produce, fiction is most exposed to people’s leisure time. Whether it’s Netflix or playing computer games or going on social media, they are in competition.”

But he was adamant that Netflix was not killing the novel, noting that book adaptations were driving much of the strongest television programming, such as Game of Thrones, The Handmaid’s Tale and the forthcoming BBC/HBO adaptation of Pullman’s His Dark Materials trilogy, and these adaptations then push up book sales in turn.

“We are one of the primary investors in original stories, and storytelling is key to all our creative industries, with so many conversions from books into theatre, film, television,” Lotinga said. “We find that very encouraging. The adaptations happen and it comes back, so it’s a wonderful virtuous circle.”

Lotinga also said readers had gravitated from fiction to non-fiction over the last five years. Citing the 24% rise in physical non-fiction sales since 2014, Tom Tivnan, at the trade magazine The Bookseller, agreed that “narrative long-form reading habits are switching, in part, from fiction to non-fiction”.

“H Is for Hawk, I think, really kicked this off, but people are looking for those ‘memoirs that matter’,” said Tivnan, “personal stories that can touch a wider complex issue (like grief, dementia, mental health) or the ‘smart non-fiction’ that has an expert explaining wider, universal issues.”

There are so many non-fiction stories that look deep into the human heart Tom Tivnan, The Bookseller

A decade ago, he said, non-fiction was dominated by celebrities such as Sharon Osbourne and Peter Kay, but now bestseller lists were full of “Adam Kay piloting his way through the NHS, the Secret Barrister wading through a broken justice system”.

“People don’t need fiction as much any more as there are so many non-fiction stories that look deep into the human heart and what makes us tick: Raynor Winn’s The Salt Path, Matt Haig’s Notes on a Nervous Planet, and on and on.

“The hottest properties for acquiring editors right now – besides trying to find the next Sally Rooney – are non-fiction authors who can write well, provocatively and become brands,” said Tivnan. “The next Dolly Alderton, the next Yuval Noah Harari, the next Secret Barrister, the next Adam Kay, the next Wendy Mitchell, the next Christie Watson. Non-fiction is where it’s at.”

Kate Skipper, Waterstones’ buying director, agreed that people liked a good story, “whether it’s real or imagined”, but attributed the drop in fiction sales to a lack of titles from big novelists last year.

“It wasn’t a stellar year for fiction by any means,” she said. “Not many of the big fiction-brand authors had titles out.” This year, by contrast, Atwood publishes the sequel to The Handmaid’s Tale in September, with new novels from John le Carré and Pullman also expected to drive stronger sales than last year.

“This year publishing is really strong and it’s strong across the categories, books that appeal to different readers, to drive customers into shops,” said Skipper. “We’re very hopeful about Christmas.”