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NAPL's Paparozzi: Rate of Printing Industry Sales Growth Will Slow Along With Economy Over Next 12 Months

Press release from the issuing company

SANTA BARBARA, CA, MARCH 8, 2007 – At a special “State of the Industry” presentation that opened the program portion of NAPL’s Top Management Conference 2007 on Thursday morning, March 8, NAPL Vice President and Chief Economist Andrew Paparozzi told the record crowd of more than 250 attendees that the printing industry “is in expansion. Our sales grew at their fastest rate in eight years in 2006 and will continue to grow, although at a noticeably slower pace. Volume has finally regained pre-recession levels. And we’ve even regained some pricing power and profitability.” Paparozzi emphasized, however, that “our rate of growth will be slowing significantly with the economy over the next 12 months,” adding that another concern is that, for the first time since 2000, unit labor costs are rising faster than productivity, which squeezes profits and capital investment, and can be inflationary. “But we are still growing,” he pointed out, “and we have been for a while. Companies that are still not participating in that growth need to quickly ask themselves why they are being left behind.” Paparozzi noted that “rather than being inclusive, expansions are becoming increasingly exclusive. That means that we have to bring the same urgency to ‘getting it right’ during expansions as we have always brought to contractions. The return to being right is greater than ever—but so is the cost of being wrong.” Key areas graphic communications need to emphasize to remain viable in today’s challenging business environment, Paparozzi noted during the TMC session, include: - Maximizing productivity and efficiency, which is essential for long-term profitability. “That’s as true when business is up as when it is down, because our upturns no longer come with a margin for error,” he said. - Organization development. “To be competitive, companies today must cultivate organization-wife the skills and behaviors required by an industry that is getting more competitive and more complex.” - Diversifying services in a way that is based on careful analysis of market demand. “In an industry that is being redefined by structural change—electronic alternatives to print, a growing trend toward shorter runs and on-demand printing, and new forms of competition—the status quo is no longer safer. But that doesn’t mean we make hasty, ill-informed decisions,” Paparozzi noted. “It means we thoroughly analyze our options, basing decisions on the best intelligence available because both the return to being right and the cost of being wrong are greater than ever.”