Published July 24, 2015
Dr Joe took a look at how the number of commercial printing establishments in New York, Los Angeles, Chicago, DC, and San Francisco metropolitan areas has changed since 2010.
Published July 23, 2015
June retail sales adjusted for inflation fell -0.6% compared to May. Month-to-month changes are somewhat volatile, so it's better to look at the comparisons to the prior year. The chart shows that June retail sales were +1.2% compared to last year, the worst comparison since March 2014. There are signs that the economy is slowing again. In the first quarter, real retail sales were +2.6% compared to the prior year, but this second quarter is only +1.6%. The economy always has conflicting positive and negative data, but this downturn in a key sector of the economy is likely to raise some eyebrows among economists and policymakers.
Published July 22, 2015
The NFIB Small Business Index was released this week, “The weakness was substantial across the board, showing no signs of a growth spurt in the near future,” according to Bill Dunkelberg, NFIB Chief Economist. “Declines in spending plans accounted for 30 percent of the Index decline, and weaker expectations for real sales and business conditions another 20 percent. The deterioration in earnings trends accounted for about a quarter of the decline.”
Published July 10, 2015
Commercial printing shipments have been much higher than they are in today's market, but the bounce off the lows of 2014 this year have been notable. The comparisons toward the end of 2015 will be harder to top since the industry started to show this bounceback at the end of 2014. The transformation of commercial printing businesses has been an arduous one, with volume declines of many mainstream products, but a rise in specialty applications. Those new applications are often based in digital printing, such as wide format specialties. There's also a new generation of print business managers who are not burdened by the myopia of history, where print was paramount. These executives and owners have grown up with computers and gadgets and have a better sense of print's new role in media communications
Published June 25, 2015
We all know how the markets seem to panic when the Fed hints that rates will be rising soon, but they already have. That is, the markets have been pushing up the inflation-adjusted 10-year US Treasury since September 2011 by 420 basis points (4.2 percentage points). The rate is now the highest since June 2010, at 2.33%. This measure can be volatile because of the inflation adjustment. We used the year-to-year inflation rate as measured by the Consumer Price Index for that reason. There are Fed governors who believe that they have great latitude to be patient with a rise in inflation since their target of +2% annual inflation has not been met. This means that they believe they have a cushion of “banked” uncreated inflation that they can use up before they move aggressively. Whatever the case, a 25 basis point rise in short term rates is not much, as they might actually be catching up to the marketplace that has already moved and the Fed is already lagging well behind it. They miss an important point. The CPI does not measure inflation in a practical way. If wages are stagnant (though a little better lately), a “mild” 2% rise can be a burden. Median household income is still 4% lower than its peak just after the recession started. A 2% rise in inflation plus the 4% lower income is a 6% difference. That's something that's rarely mentioned in the business press.
Published June 18, 2015
The Fed's downward revisions to their GDP forecasts brings their estimates in line with an economy running in the general range of +2.25%. But sometimes we need a forecast in a hurry, and that needs credibility beyond that of yours truly.
Published June 18, 2015
Since the start of the recovery all the way back in mid-2009, advertising agency revenues have increased by +$32 billion, +40% since that time. There are many economic indicators that have never recovered (such as full time jobs) but ad agency revenues have blown through the pre-recession high of $91 billion and is now running at the rate of $112 billion annually. The agencies have had this performance because they are immersed in the media upheaval, riding and stoking the changes in communications formats on behalf of their clients. Wages have followed this shift in media, and has been documented by us before. The average public relations pay is about $10,000 more than the averaged of all agency wages. Book publishing industry revenues have stabilized, and trends of newspaper and periodical publishing revenues are still down, but at a lesser rate.
Published June 11, 2015
In spite of recent strength in US commercial printing industry shipments, employment is still on a downward path. The industry seems to becoming more efficient, somewhat from better management, and somewhat from consolidation as weak establishments are aborbed or exit the market. Compared to April, however, the Bureau of Labor statistics estimates that employment increased by about 600, which is common compared for May in recent years. The April public relations employment was very strong compared to the prior year and is up +8.8%. When PR employment is excluded from ad agency employment, the number of employees in agencies is still up +2.1%. The employment data have always reflected the changes in the media market as well as the strength in the economy. Though the economy is slow, advertising agencies have reinvented themselves and are very active in social media and digital media production.
Published June 11, 2015
I've used the Magazine Publishers Association Factbook for almost 30 years. Now it's the Magazine Media Factbook. It is packed with sunny data about magazine readership that are almost all positive about magazines. It's worth getting, and is a free download.
Revised Commerce Department Data Sends Forecasts in Opposite Directions: Will US Printing in 2020 be $90 Billion or $27 Billion?
Published June 10, 2015
Data for the end of 2012 and the beginning of 2013 were revised to a slight rise in shipments when the original data showed a steady and significant decline. That period of mild increase was followed by a period of decline that was smaller in magnitude than originally reported.
Published June 4, 2015
This chart shows how the US commercial printing shipments have been better compared to the prior year for the last 11 months of reporting by the Commerce Department. What's it mean? We're still averaging $400 million per month less than a similar period in 2010-2011, and we're well below the levels of ten years ago by about -$2.8 billion per month. The recent stability may be the result of several factors. First, weak companies are gone as a result of closures and consoPrinting Shipments Rising, Best April Since 2010lidations, leaving companies that know what modern print users need. Second, there has been a generational change in management to owners and executives who are more comfortable with digital technology because they have always used it, growing up with cell phones, video games, and computers everywhere. Third, the big targets for displacement by digital media have been pulverized, and what remains are specialties and applications more appropriate to a multichannel integrated media marketplace. Fourth, there a more companies using business development techniques (tell us about your target audience and how we can make your digital initiatives more effective) rather than old sales techniques (would you like to see my equipment list?). Then again, it could be the calm before another storm. New data networks are on their way, such as 5G, where two hour movies can be downloaded in six seconds rather than six minutes. Print has a good story to tell, but please, don't make it an old story. Print needs to be fresh and new. The market may be stable now, so use this time well to get ready for the market ahead.
Commerce Department Revises US Commercial Printing Shipments Data: Revises Shipments Higher for 2013 and 2014
Published June 2, 2015
Every May, the US Department of Commerce issues “benchmark” revisions to the manufacturing shipments data it reports. Every month, the shipments report is used by economists and analysts at Government agencies, such as the Treasury Department, but also by banks, businesses, and others, to identify strong and weak areas of the economy, and to forecast future economic conditions. The reports are based on a combination of actual and estimated data from economic models.
Published May 28, 2015
The Commerce Department released its “Nonemployer Statistics” data for 2013, showing that these businesses increased to 23 million since 2012, and by 30%, three times the rate of population growth, since 2002. Let's call them “microbusinesses.” They are now more than one in seven of the workforce.
Published May 28, 2015
This year Mary Meeker presented her always interesting annual review at the Code conference, a “who's who” and “who matters (today)” in California.
Published May 21, 2015
Last week, the US Department of Commerce released its annual revisions to manufacturing shipments. Printing shipments estimates were increased a total of approximately $10 billion combined for 2013 and 2014. The data softened the decline in 2013 shipments by a considerable margin and also reaffirmed the recent rise in printing shipments over the last ten months. While shipments in 2014 were still below 2013 on an inflation-adjusted basis, the pattern of the last few years shows a decline in shipments that is more muted than the Commerce Department originally reported. Our advice is the same: this is breathing room that can be used for restructuring of print businesses with forward-looking strategies that can take advantage of the next waves of communications technologies, while implementing sales and marketing processes that are appropriate for the times ahead.
Published May 14, 2015
These data about US commercial printing establishments are from the newly released 2013 County Business Patterns published by the Bureau of Labor Statistics. At the turn of this century, there were nearly 38,000 establishments engaged in commercial printing and services; in 2013 there were nearly 27,000. These data do not include inplant printing departments or packaging, but do include label printers and trade services. An establishment is a separate location in a practical definition, and a firm can own more than one establishment. The number of establishments is in response to the size, scope, and nature of overall print demand, but there are other factors.
Published May 14, 2015
Dr Joe. digs into the last 2015 GDP trends, last Friday's overall unemployment report, and US commercial printing employment.
Published May 8, 2015
The last ten months of US commercial printing shipments have increased +3% compared to the same months of the prior years. For the first calendar quarter, shipments are up +3.5% compared to the same quarter of 2014. There has not been this kind of growth for about ten years. Please note, however, that the Commerce Department is revising at least three years of historical data next week; it's not possible to determine how the data will change. Assuming the pattern of these data remain the same, it's not a long term bottoming of the shipment level that will turn upward again. The march of digital technologies that offer alternatives to print will continue (read what 5G networks will bring in 2020, for example). It's more likely a pause that should be used to reposition well-running print businesses for the future, consider investing in capabilities and businesses that will take advantage of the new communications innovations ahead, and develop alliances with others whose talents will be needed to do so. This might be 2005-2007 playing out again for us. If your business is growing, don't rest on your laurels. Appreciate the flexibility your business has to prepare for the future and use the time wisely. Never hunker down and wait for things to play out.
Published May 8, 2015
Based on the computer technologies of the time, an iPhone in 1991 would have cost $3.5 million. The memory alone is a cost marvel. In 1991, 1GB of flash memory was $45,000. Today, it's 55 cents. An iPhone with 32GB has more than $1.4 million of 1991 memory in it.
Published April 30, 2015
The GDP estimate of Q1-2015 growth was at +0.2% when consensus was +1.0%. The estimate will be revised at the end of each of the next two months. That consensus estimate of professional economists has been revised down regularly since the beginning of the year, with many of the original estimates at +3% or higher.
Published April 30, 2015
The 2013 County Business Patterns report was just released by the Bureau of Labor Statistics, one of the most valuable of all government economic reports. The data are based on Social Security tax filings made by employers. In this manner, the BLS can count the number of business establishments and the number of employees of those establishments with great accuracy from analysis from the mandatory filings of Form 941, submitted with company payroll taxes. As the data show, content creation businesses have much higher per employee annual salaries. This makes these industries very attractive to new employees, especially those starting their careers. The most interesting to me is the rise in public relations agencies. In the late 1980s, the payroll for ad agency workers was about one-third more than public relations. In 2005, they were about the same. In these 2013 data, PR employees are paid about one-eighth more.
Published April 30, 2015
Published April 23, 2015
The Bureau of Labor Statistics publishes many indexes of inflation, the best known of which is the Consumer Price Index. The BLS also publishes hundreds of other indexes in the Producer Price Index (PPI) series that track price changes in industries, products, and commodities. This week's chart shows the year-to-year change in CPI (orange line) and the PPI for printing (blue line) on a monthly basis for a little more than ten years. For most of that period, printing prices have lagged consumer prices, often by wide margins. Since December 2004, printing prices are up +14% while consumer prices are up +27%. That is, printing prices are increasing at about half the rate of consumer prices. Or, looked at differently, printing prices are about -10% less than the change in consumer prices: print is getting cheaper every day. But print owners and their workers cannot spend printing dollars when they go to the supermarket; they have to make up for the 10% shortfall in prices somehow. This is difficult since many of the prices printers need to pay for wages and materials more closely follow consumer prices. It's a double-edged problem: lower revenues, higher costs. Profit leaders have figured out how to survive in this environment as they still stand out from their peers. But these double-edged pressures have caused weak companies to leave or offer themselves as consolidation candidates.
Published April 17, 2015
Bloomberg.com has created a web page that summarizes labor market data in one convenient place. In Congressional testimony and in public discussions, Dr. Yellen has stated that she watches a “dashboard” of labor market indicators. I'm of the age that the mention of “dashboard” is a reminder of the Meat Loaf hit of the 1970s.
Published April 16, 2015
The monthly NFIB Small Business Index took a step back after it nearly reached the pre-recession high. The chart shows that high of a few years ago as a green line. The index fell almost to the bottom of the 2003 recession level. For a few years the Index seemed range-bound between that recession and the lows of the recession of the early 1990s (the two red lines). This particular survey had all ten elements of its index fall, which is highly unusual. The Index bears watching as there are very few data series that follow small business activity.