Printing outlook improves

16 November 2010

More than half of the respondents to the latest Printing Outlook survey in the UK, published in September by the British Printing Industries Federation (BPIF), reported no change in trading conditions during the summer months. However, the survey also revealed that a third of firms saw an improvement, with just 11% stating that the market had deteriorated in that period.

This positive balance of +22 is ahead of the good performance registered three months earlier and compares very favourably with the situation at the same time last year, when a negative balance of -12 reflected the market’s weakness.

Both order levels and production have responded to gradual market improvement, with almost two fifths (39%) of print firms reporting an increase in domestic order levels during the summer. Although just 18% of print firms expect general trading conditions to improve, no less than 70% predict a rise in domestic order levels this autumn. A knock-on effect for output is predicted, with three quarters believing production will rise.

Somewhat surprising was the unexpected cut in employment levels, with a third of printers shedding jobs.

Fewer companies reported narrower margins. Here, the summer result once again ran close to forecast, with a balance of +1 versus a projection of -5 last time. Unfortunately, profit levels are not benefiting from this: the number of firms making a loss this time actually grew, with 15% failing to make a profit compared with 3% at the time of the last survey.

Further paper and board price hikes are expected over the next few months, while only a third of UK printers have been able to pass the full impact of rising paper prices on to their customers. Further price pressure is expected by 81% of survey respondents, the remainder believing that prices will stabilise at existing levels. A further 57% managed to offset part of the additional charge by raising prices to some degree, while 10% swallowed the entire cost burden. Two-fifths of printers surveyed said that they had experienced a problem with supply shortages this year.

The vast majority (91%) of companies surveyed are investing in plant and machinery, which is good news for printing press manufacturers, with 36% expecting to spend more over the coming 12 months.

Print and packaging insolvencies are now below their equivalent 2009 level. The latest data from the Begbies Traynor Red Flag Alert statistics reveals that 70 print and packaging companies became insolvent in the second quarter of 2010, down from 111 in the preceding quarter. Meanwhile, the level of bad debt remains a cause for concern for many printers.

Corporate Affairs Director of the BPIF Andrew Brown commented: “With the majority of respondents reporting stable or improved conditions over the summer, the Print Outlook results are very encouraging, as is the prospect of a further period of stability. However, the industry is still trading well below pre-recession levels and there are continuing uncertainties with regard to whether the improved UK economic conditions will hold up in the period ahead. Paper price increases, and over-capacity leading to sub-cost pricing in the market all remain common causes for concern for our members, and profit levels remain weak.”

Maureen Byrne,


Maureen Byrne

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