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NAPL Future of Print Survey, PBI Index continues to drop

Press release from the issuing company

Paramus, N.J., March 10, 2003 – Enduring success for printing companies will depend not on a company’s size, but rather on its ability to continue to redefine itself and respond effectively to customers’ evolving communications needs, reports the 2003 Future of Print survey from the National Association for Printing Leadership (NAPL). According to survey participants, essential elements of enduring success include a continuing move to digital, integration of workflow and services, employee training, and a commitment to continuous improvement. The Future of Print survey is prepared by NAPL’s Printing Economics Research Center (PERC), which produces research and publications sponsored by Heidelberg, Kennesaw, Ga. Survey participants, 145 printing companies with annual sales ranging from less than $200,000 to more than $200 million, were optimistic about their revenue growth. All respondents forecasted average sales growth of 9.3% a year over the next five years, far outpacing projected growth for the industry as a whole, which is estimated at only 3.5% to 5.0%. The optimistic forecast is based on an expected shift of market share to those printers who are prepared to provide effective solutions to customers’ changing communication needs. “In considering which companies are going to be around in five years, the temptation is to conclude the bigger the company, the better the odds,” notes Andrew Paparozzi, NAPL vice president and chief economist. “However, enduring success will be reserved not for companies of a particular size, but for those who understand that they are in the communications business, not the ink-on-paper business, and who are able to meet their customers’ growing demand for new communications options and preferences.” In other survey findings: Bindery and finishing equipment systems; employee training/education; and four-or more-color lithographic systems were identified as the top three investment priorities over the next five years by all respondents. Lithographic printing and associate preparatory and bindery/finishing services are expected to fall, on average, from 81.6% of revenue today to 69.1% by 2007. No participants projected that litho’s share of revenue would fall below 64.5%. Digital printing is expected to rise from 5.6% of sales to 12.6% in 2007, with companies of all sizes forecasting growth would more than double. Value-added/communications support services are projected to increase from 7.8% of revenue currently to 14.5% in 2005. Printing Business Index continues to drop In other economic analysis from NAPL’s Printing Economics Research Center (PERC), the NAPL Printing Business Index (PBI) declined for the fourth consecutive month to 47.4 in January from 48.0 in December. A PBI above 50.0 means more printers report activity is picking up than report activity is slowing down; a reading below 50.0 means the opposite. The decline in the PBI notwithstanding, however, NAPL’s Paparozzi points out that “we have made meaningful progress despite all the ups and downs. Our January reading is the lowest in six months and the third straight below the critical 50.0 mark, but it’s still 18.6% above year-earlier levels.” Paparozzi notes that NAPL’s printing industry indicators are generally reliable precursors to how the economy in general is performing. “The printing business reflects an upturn or a downturn in many sectors of the economy almost immediately,” he says. “There’s none of the lag time that there is with many other indicators.”