The new year promises to be another challenging one for graphic communications companies. Industry economists project that printing sales will grow by a modest 1.5% to 3.0% this year, and that’s before adjusting for inflation. Several industry suppliers recently announced price increases for printing plates and other consumables, and many observers expect paper prices to increase as well. Employers’ health insurance costs are also expected to increase in 2006—by 9.9%, according to benefits consultant Hewitt Associates.

Diversification is not an automatic cure for lackluster revenue growth and anemic profitability. Many printing companies that have added numerous new services have yet to see any significant improvement in revenue growth or profitability.

Given this difficult operating environment, one of the most serious challenges facing graphic communications firms in 2006 will be to grow revenues and profits. As I have said before, growth is to a business what oxygen is to a living organism—it is the essential life force of the organization. Growing companies thrive; those that don’t grow consistently soon begin to shrink and eventually vanish.