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When July Shipments Get Tough, the Tough Go to Graph Expo; Commercial Printing Shipments Down -2.7% in July vs. 2010

July 2011 printing shipments were down -

By Dr. Joe Webb
Published: September 1, 2011

July 2011 printing shipments were down -$180 million (-2.7%) compared to July 2010. This is four months of decline on a current dollar basis. Once adjusting for inflation, the figures are -$424 million, or -6.1%. Indeed it was a tough July, and all the more reason to use the upcoming Graph Expo to take a serious look at strategic issues facing printing companies of all sizes. I wrote about the strategic perspective for Graph Expo in a recent blogpost, where I recommended some of the educational programs that would help owners get a new perspective for their actions. The chart below (click to enlarge) shows the change in the trend of the business. Back in 2010, I advised owners to consider that time as “breathing room” and not as a long-term upward shift in business conditions. That time would be used to restructure and reorganize for some of the issues that would be faced later in 2011 and beyond. That breathing room period is shown by the blue line from around April 2010 to January 2011 where the comparisons to prior year were above 0%. The monthly comparisons have been worsening in recent months and look similar to the period at the start of the recession at the end of 2007. We obviously hope that is not the case, but business expectations of economic forecasters, and the actions of consumers, indicate otherwise. During these times, the urgency to act in a proactive way to position printing companies for a more intense digital media environment is crucial. Remember: the economic conditions we face are minimal compared to what is happening in digital media. Even in a strong economy, the competition from digital media would create downward pressure on the use of, and preference for, print. Many companies seek to get involved in some format of business combinations in times like these. If your business is considering a consolidation partner, look for ones that can bring the as much of the following to the table:
  • capabilities in digital communications, not just from a production standpoint, but from an integrated communications one
  • a workforce that understands the role of print as specialty communications
  • ability to make investments in printing technologies that significantly increase productivity and lower costs; a healthy print business is necessary to fund digital initiatives
  • a record of good implementation of strategy and wise financial management.
If your company is intent on staying independent, be sure to take a good hard look at your resources and your strategy. We often hear that print businesses need to become marketing service providers, but that is definitely not for everyone. Remember, there are opportunities in communications logistics (managing deployment and implementation of communications plans), offline media (broadening into non-digital communications specialties), and commodity printing (high productivity plants that consolidate the volume of others). Background on these can be found in Renewing the Print Industry and Disrupting the Future, both of which can be downloaded for free. I look forward to Graph Expo, as should print businesses, to aid print business executives in grappling with these industry and economic issues. Be sure to sign up for our special annual breakfast event, sponsored by manroland for the ninth year, where these and many other topics will be discussed. The event is Monday, September 12, at McCormick Place. See you there... and watch for a special announcement about it next week.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink.com's Economics and Research Center.

What do you think? Please send feedback to Dr. Joe by emailing him at drjoe@whattheythink.com.

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