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State Of Printing Industry: Economic Recovery Is No Cure-All

Tuesday, November 25, 2003

Press release from the issuing company

PARAMUS, N.J., NOVEMBER 24, 2003 – The printing industry is finally showing signs of what may be a sustainable upturn, following more than two years of steep and broad sales declines, according to The NAPL 2003-2004 State of the Industry Report, issued this month by the National Association for Printing Leadership. Based on the input of more than 670 printing companies, the economic and industry analysis presented in the Report is conducted by NAPL’s Printing Economic Research Center (PERC), which produces research and publications. Although printing sales rose only a modest 2.6% in September compared to a year ago and are down 2% year-to-date, a look at real print sales (adjusted for deflation) shows a brighter picture: Real print sales are up 0.7% so far this year, following declines of 3.8% in 2002 and 4.0% in 2001. Even brighter is the outlook for 2004, when NAPL forecasts print sales will grow as much as 4.1% before adjusting for price changes, although a return to pre-recession volumes is not likely to happen until 2005. According to the Report, pricing pressure—which remains unrelentingly strong—should let up somewhat by mid-2004, providing a much-needed boost to profitability. Business picked up in October for 51.1% of NAPL’s Printing Business Panel and slowed for 18.5%. Reports of rising activity among this group have now been far more frequent than reports of declining activity for four consecutive months, a good indication that the upturn will be sustainable. The general economy is showing encouragingly broad gains, with gross domestic product (GDP) growing at a whopping 7.2% real annual rate in the third quarter of 2003. A recovery that had been limited to consumer spending and housing is now spreading, with sizable increases reported as well in other key sectors, including capital investment and exports. Andrew Paparozzi, NAPL’s vice president and chief economist, notes, however, that printing companies can no longer rely on an economic rebound, no matter how robust, to grow their businesses. “The economy is accelerating rapidly. Corporate profits are rising, so ad spending will too. Next year is an election year and an Olympic year. Not long ago, all of that would have meant good times across our industry,” he notes. “But now, printers have to prepare for growth in markets that are getting a lot more competitive in a lot of ways. There’s a redistribution of business going on in our industry. To be on the right side of that redistribution, printing companies have to take share in markets that aren’t growing fast enough for everyone and defend market share from an expanding array of competitors.” In addition to in-depth information on printing sales and profitability, The NAPL 2003-2004 State of the Industry Report includes macroeconomic data for the national economy, analyses of current and future industry trends, in-depth chapters on diversification, marketing, and e-commerce in the printing industry, and a look at the strategies used by NAPL’s Long-Run Growth Leaders?—a group of printers tracked by NAPL that have consistently exceeded industry averages for profitable growth. Copies of The NAPL 2003-2004 State of the Industry Report are provided free to NAPL Corporate Members and Associate Members (NAPL Individual Professional Track printers may purchase it for $275.) In an effort to help the larger printing community benefit from the Report’s in-depth analysis and insights, NAPL is making a special offer this year in which non-member printers may purchase the Report for $299. The Report is available to non-printers through NAPL’s Leading Indicators Service. For more information or to order, contact NAPL at (800) 642-6275, Option 3.




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