March 28, 2003 -- Market Conditions for Print The negative market sentiment since December of last year continued this month. Fourth quarter 2002 GDP grew only at 0.7% while the growing specter of war created uncertainty about future economic growth. March data shows slightly greater negative market sentiment this month compared with last month. Again, this uncertainty is consistent with overall economic uncertainty that has been strongly tied to the prosecution and developments around the war in Iraq and the impact that the war has had on the domestic economy. Six-Month Outlook Printers’ six-month outlook for their local market has tracked down from its peak in November to low points in January and February of 2003 but this month the outlook turned negative for the first time in the last twelve months. The outlook for growth at the individual company level also fell sharply. Again this negative outlook is surely influenced by current economic conditions and concern about future threats to the economy. Whether second quarter performance will actually be substantially affected by current events remains to be seen. What is your outlook for the next 6 months on the level of demand in your local market and for the growth of your business? (by percentage. Mean: -0.44% decline in demand. Example, 33% of printers surveyed expect 0% growth in the next 6 months.) Capital Equipment Purchases Prepress and bindery equipment continued to be by far the most commonly purchased capital equipment with 20% of respondents indicating that they purchased prepress and bindery equipment in March. Purchasing levels for all other equipment remained approximately the same as previous months with the exception of print management software purchasing, which saw a solid 2% increase in March. The percentage of printers not purchasing capital equipment last month fell slightly but is still consistent with the level of purchasing over the last 12 months. The percentage of printers not buying print equipment was 64% versus 69% last month. Printers may be ramping up their equipment purchasing to prepare for a busier second quarter. If annual trends continue to hold true and barring any external growth inhibitors stifling growth in this market, we could see stable conditions in equipment purchasing and then a substantial increase in the late spring and summer. To receive all the charts for the different segments, please contact Jeff Hayes at CAP Ventures. His contact information is below.