CAP Ventures & WhatTheyThink.com: December Printer Confidence Index
Monday, December 10, 2001
12.10.01 - The first product under a new collaboration between WhatTheyThink.com and CAP Ventures is complete. The monthly Printer Confidence Index measures opportunities and challenges by examining print demand and capital spending plans within the graphic arts industry. Highlights for December: - Over half of printers see a decline in demand. - December demand for print will be the same or down from November. - Printers expect a (-0.6%) decline for their local market in the next 6 months. - For their own business, printers see an (3.3%) increase in demand. - The Mountain region of the US showed the strongest confidence. - In December, the most cited planned purchase is digital black & white printers. - Over the next 6 months, frontend and backend equipment will mostly be acquired. Complete results including charts, graphs and additional analysis is available at: http://members.whattheythink.com/home/research1201.cfm Local Market Conditions There is clearly a negative sentiment among print providers about the conditions in their market for print. Over 50% of printers indicated that demand for print in their local market is either starting to slip or continues to decline. Only 12% indicated that their local market is growing. In general, CAP Ventures believes the current market conditions in most regions and size of companies is highly competitive, with significant pricing pressure and many companies seeking to reduce capacity by lowering hours and/or reducing staff. December Print Demand As might be expected given the negative sentiment for local market conditions, the majority of printers indicated their December print volume will either be the same or decline compared with November. 75% of printers indicated that, given their current backlog of work and expected sales, they expect their total December print volume to stay the same (41.1% of printers) or decrease (33.9%) compared with November. 6 Month Outlook for Print Demand CAP Ventures asked printers to indicate by what percent they expect demand to change in their local market and for their business. Overall, printers’ outlook for their local market over the next 6 months is flat to slightly declining (-0.6%). However, printers’ also have an optimistic view for their own business indicating an expected increase of 3.3% over the next 6 months. By geographic region, once again, printers are more optimistic about their own business than their overall local market. Over the next 6 months, expected local print demand for the Northeast, Pacific, South and Midwest was negative. The Mountain region showed the strongest confidence followed by the Midwest. December’s Capital Spending on Equipment The near term and mid-term outlook for capital equipment purchases is modest. For the month of December, the most commonly cited equipment that printers plan to acquire is high-speed black & white digital printers (6.5%) followed closely by prepress equipment (6.3%) which includes workstations, scanners, imagesetters, proofers and other devices. Given the generally negative sentiment for print volume, CAP Ventures believes a growing percentage of capital equipment purchases, especially for digital printing equipment, will be to replace devices that have expired leases vs. for additional capacity. 6 Month Outlook for Capital Spending on Equipment For each of the production equipment categories, roughly 10% to 15% of printers indicated that over the next six months they plan to purchase something. Most printers indicated they will be investing in the front-end (prepress 33.8% of respondents) and backend (bindery and finishing equipment 23.7% of respondents) of the printing process. Another interesting note is that, in general, large print providers ($20 million or more in annual sales) were the least likely to be making any capital purchases in December or over the next 6 months. CAP Ventures believes this lower investment sentiment is a function of many of the larger printers having been hit hardest by the recession. About: CAP Ventures is a strategic consulting firm for providers and users of business communication technologies and services. They deliver key research, analysis, forecasting, benchmarking, and strategy recommendations to make a competitive difference in their clients’ businesses WhatTheyThink.com is the print and publishing industry's leading online community. The company offers a mixture of free and subscription-based content for industry executives. Additionally, WhatTheyThink.com provides a robust content syndication program serving related web sites.