Not Your Average “State of the Industry”

“Think of the economy as a person who has been extremely ill,” NAPL Vice President and Chief Economist Andrew Paparozzi suggested. He continued the analogy by saying that when a person is recovering from illness, there will be days when they feel much better and other days when they may not feel as if they are any better at all. They may even feel as if they are having a relapse, but eventually, their recovery will be complete.

Paparozzi told attendees that this is not a double dip recession, but the recovery is no boom, either. The common wisdom is the deeper the recession, the better the recovery. That’s because recession creates a pent-up demand for goods and services. When the economy begins to recover and consumers feel that their jobs are secure, they feel comfortable loosening the purse strings and this feeds the economy to allow it to grow even more strongly.

What makes this recovery different is what Paparozzi terms the debt overhang. Lingering business and consumer debt is acting as a dampener to the recovery, meaning it will not be as robust as we have seen after previous recessions. In fact, NAPL expects the printing industry to see “below trend” growth at least through 2011. Total commercial print industry sales are projected to grow from 1-3% next year.

The dampened recovery, coupled with changes in technology, is fueling a structural change to the way business is conducted. Paparozzi cautioned, “Structural change can be either an opportunity or a threat—you decide which.” To that end, he devoted the majority of his seminar to outlining actions that can help printers make the most of even a slow recovery.