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The NAPL 2006 State of the Industry Report: Why No One Can Afford to Do Business the 'Same, Old Way'

Press release from the issuing company

PARAMUS, N.J., FEBRUARY 23, 2006 – How to best bring value to clients? What are the real costs of service diversification? Are “niche printers” safe from the vagaries of the business environment? How can you make contact with clients as productive as possible? How are companies getting and keeping clients? What are the “speed bumps” ahead in 2006? These are just some of the key issues explored in the NAPL 2006 State of the Industry Report, recently released by NAPL (www.napl.org), the trade association for excellence in graphic communications management. “The issues explored in the 2006 Report are redefining our industry so profoundly that no company, regardless of size, can afford to do business the same old way,” said Andrew Paparozzi, NAPL vice president and chief economist. “The Report identifies the issues companies must address to move their organizations forward in this challenging and changing business environment.” Rising wages and benefits, increasing energy costs, and an uncertain economy are among the top concerns of printing and graphic communications companies in all size categories, according to the Report. “Printers are concerned about a profit squeeze, as costs continue to rise in markets that are not receptive to price increases. At the same time, the economy is sending signals of a pending moderation. Recession isn’t likely, but, particularly after midyear, we’re likely to see the economy slow from the robust 3.5% to 4.0% growth of the last two years to a 2.5% to 3% or even a 2.0% to 2.5% pace,” says Paparozzi, who notes that “every one percentage-point reduction in GDP growth cuts printing industry revenues by more than $1 billion.” The NAPL Report cites continued moment in sales heading into 2006, with the NAPL Printing Business Index (PBI), the Association’s most comprehensive indicator, equaling 57.6 in November and 57.7 in October. (A reading 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.) However, while the PBI remains well above the critical 50.0 mark, a relatively low reading in confidence suggests that the momentum is not sustainable. The economic analysis comes from NAPL’s Printing Economic Research Center (PERC), which produces research and publications sponsored by Heidelberg, Kennesaw, Ga. Participation in the 2006 State of the Industry Report was at record levels, with input from 693 companies ranging from small, family-owned businesses to large, publicly held companies. In addition to economic and printing/graphic communications data that is unsurpassed in the industry, the hallmark of the NAPL SOI Report is insightful analysis of industry trends that goes “beyond the numbers.” The in-depth analysis provided in the Report is enabled by the ongoing relationship NAPL economists have developed with a broad base of printing and graphic communications company executives. “We’ve successfully recruited the active participation of hundreds of executives who are thinking seriously about their businesses and their industry and who welcome being challenged on their thinking,” says Paparozzi. “This enables us to tell printing company executives what they can expect in the business environment so they can minimize the number of surprises and not be caught unprepared for challenges or for opportunities.”

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