NAPL July Printing Business Conditions Update Raises Doubts About Industry’s Ability to Sustain Modest Recovery Begun Last Spring PARAMUS, NJ, August 20, 2002 — The ability of the printing industry to sustain the modest recovery begun last spring was brought into doubt by a continuing decline in key printing business indicators, according to the July Printing Business Conditions Special Update, issued by the National Association for Printing Leadership (NAPL), the trade association for the commercial printing industry. Despite the decline, NAPL expects the recovery to continue and activity to accelerate this fall, although the anticipated recovery will be too little and too late. Total print sales are expected to decline in 2002, marking the industry’s second consecutive year of declining sales in nearly three decades. The NAPL Printing Business Index(PBI), the association's comprehensive measure of printing industry activity, fell to 45.1 in July, down from 45.6 in June. The PBI has now been under the 50.0 mark for three consecutive months and has fallen 15.9% since attaining a 19-month high of 53.6 in April of this year. A PBI reading above 50.0 signifies that more printers report business is picking up than report business is slowing down. Conversely, an index reading below 50.0 indicates the opposite condition. NAPL Vice President and Chief Economist Andrew Paparozzi commented, "Originally we expected print sales to grow 2.2% to 3.4% in 2002. But that's not going to happen. Recovery has been even more muted and erratic than we expected. Print sales were very weak through midyear, and the second half isn't exactly off to a flying start. Sales will benefit from more favorable year-to-year comparisons as we move into the third and fourth quarters. However that will not rescue the industry from a second consecutive year of declining sales for the first time in nearly three decades." "Our revised 2002 forecast sees printing sales falling as much as 1.9%, following on the heels of last year's 3.9% drop," Paparozzi continued. "Our 2003 forecast remains unchanged. Assuming no setbacks in our war on terrorism, print sales will advance 6.1% to 7.5% next year as recovery accelerates." The NAPL Printing Business Index NAPL developed its unique Printing Business Index (PBI) as a comprehensive measure of printing activity that includes critical metrics such as current business conditions, expected future business conditions (confidence), work-on-hand, hiring plans, and pre-tax profitability. A PBI reading above 50.0 means that more printers report that activity is picking up than report that activity is slowing down. A PBI reading below 50.0 reflects the opposite situation. The PBI declined to 45.1 in July 2002, off from 45.6 in June. The PBI has now hovered under the 50.0 level for three consecutive months and has slid 15.9% from its 19-month high of 53.6 in April 2002. NAPL’s Printing Business Conditions Special Update includes information on printing industry sales and profitability, as well as macroeconomic data for the national economy. Available to NAPL corporate and associate members only, the update report is published six times a year by NAPL’s Printing Economic Research Center. NAPL corporate and associate members who wish to receive the report free via e-mail immediately upon publication may sign up for this service by calling Roland Dumas at NAPL, (800) 642-6275, ext. 1347. Copies are also available free of charge to those members through the NAPL website at www.napl.org. Further information about NAPL economic research programs may be obtained by contacting Mr. Paparozzi at the NAPL Printing Economic Research Center at [email protected]. About NAPL Chartered in 1933, NAPL is a not-for-profit trade association representing the $88 billion commercial printing industry. NAPL’s mission is "To enable the printing community to profit from change" through a full range of management and educational services to its membership. In addition to on-site training at its Center for Professional Development in Paramus, New Jersey, and Management Institute (MI) courses held at Northwestern University, NAPL offers consulting services as well as an annual Top Management Conference (TMC) recognized as a leading industry source of strategic ideas. The organization’s Printing Economics Research Center (PERC) produces the Economic Edge newsletter, the Printing Business Conditions Special Update, and the Leading Indicators Service, a source of late-breaking data on trends within the graphic arts industry. Its Communications Department develops and distributes a variety of industry-specific periodicals and special reports, including Printing Manager magazine. NAPL also has a 33% interest in the Graphic Arts Show Company, which owns such major industry events as Graph Expo and Print.