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NAPL: Print Sales Should Rebound; Real Recovery Far Off Though

Press release from the issuing company

CHICAGO, June 17, 2003—“If the economy recovers as expected, print sales will grow 1.0%-2.5% this year and as much as 4.1% next year,” but “sales volumes robust enough to restore pricing power and profits—the hallmarks of real recovery—may have to wait until 2005,” said Andrew Paparozzi, vice president and chief economist of the National Association for Printing Leadership (NAPL), in a general session address on June 1 at the GATF/PIA • NAPL Sheetfed Pressroom Conference in Chicago. Paparozzi pointed to key economic indicators that signal the economy is healing, although still slowly. “Despite the war, the gross domestic product has now grown for six consecutive quarters—sometimes vigorously,” he said. “However, the recovery has been too narrow. Consumer spending, particularly for motor vehicles and housing, has been healthy, thanks to exceptionally low interest rates, but other key sectors of the economy, including capital investment, exports, and manufacturing, continue to struggle.” Economic recovery is expected to accelerate after midyear, with the GDP growing 2.3% for all of 2003 and 3.6% in 2004—the fastest pace in four years, said Paparozzi, stressing that the expected economic recovery will not benefit all printers, but only those who recognize that “they are in the communications business, not the ink-on-paper business. The way people communicate is changing profoundly—printers have to recognize that and become a part of it. “Economic recovery isn’t going to make everything right again,” he said. “Printers’ clients have new communications options and preferences. For those who remember that, the opportunities are historic. For those who forget it, recovery isn’t going to look very different from recession.” “Printers who participate in the expected economic upturn will not be companies of a particular size or equipment configuration or location or those offering a specific product. Rather, they will be the companies that are best prepared to take on an expanded role in filling their customers’ changing communications needs,” he explained. He noted that “growth will come by supplementing printing, not abandoning it,” pointing to proprietary research by NAPL’s Printing Economic Research Center (PERC), in which 62.3% of the survey group reported that offering value-added/communication-support services increased their print revenue.