“Even though many large companies are completing mergers and acquisitions, changing or updating architectural signage to reflect these changes is being delayed,” said Lance Hutt, global product manager—Digital, Avery Dennison Graphics & Reflective Products Division. “Many large and corporate jobs are on hold. Large national companies are holding back and are not as aggressive with branding and identity projects. However, they are still pursuing shorter term product-focused promotional campaigns.”
“Even though these shops produce graphics for many different industries, trade shows are down as a whole substantially,” said Mohni. “Companies are cutting back on travel unless it is critical which drives attendance down and exhibitors are making due with their current displays and graphics. These factors have caused a lot of pressure on some trade show shops.”
According to experts, the vehicle and fleet graphics markets were affected mainly because of its tie to advertising and marketing dollars. Some companies have not pulled back entirely, but have moved to partial wraps to continue branding and advertising. It’s a less expensive option that gives them exposure to the market.
Another industry that has seen tremendous hits over the past couple of years has been the architectural, engineering and construction (AEC) markets. Growth in this market segment has generally been flat, a few companies seeing minimal growth somewhere in the neighborhood of a few percentage points. “I think the markets closest to the building and construction industries have been impacted at the highest levels,” said Greene.
“The CAD segment, however, has been hit the hardest. Reprographers were struggling anyway as they tried to incorporate building information modeling (BIM) into a new business model. The bursting of the housing bubble—not just in the United States, but other countries like the United Kingdom, Spain, Italy and Eastern Europe—is putting the final nail in the coffin for many AEC customers,” said Florek.
“This market is fueled by the building industry and we all know that market has been one of the hardest hit in this economy. Many of our large-format printer partners have felt the most pain from this market collapse,” said Steve Blanken, sales director, Contex. “I think the turnaround will begin late fall although I do not believe it will be a windfall turnaround. We are starting to see some of the stimulus money hit the government infrastructure markets and this, we believe will slowly get the ball rolling in the building markets, hopefully moving in them in the right direction.”
Greene agreed with Contex’s Blanken. “There are already positive signs and positive reports, in a recent survey we had many print service providers report that they believed the business would rebound in the second half of 2009 and the first part of 2010.”
Right now, the question on everyone’s mind is: When will the recovery begin? Has it begun? If so, when will the wide- and grand-format industry start to feel the changes? Many are taking the lead from federal government economic forecasts which predicted the start of a slow recovery in late-2009. Alcan Composites’ Masters feels that “the worst is definitely behind us,” which is good news. But, is he alone with his optimism?
“As for improvements in the state of the industry as a whole, we have seen positive signs, almost monthly, since the fall of 2008,” said MACtac’s Moore. “However, it would be difficult to predict the exact timing of a return to normalcy for our industry. This is a day-by-day recovery, and even today I think everyone understands just how fragile the tipping point is for advancement versus decline.”
“Although we are far from seeing a complete recovery we are hoping that things bottomed out in May, as we have seen improvement the last couple of months. The impact to our same center sales was dramatic beginning in October 2008 and I believe it will take some time before we see growth trends similar to what we saw in 2006 or 2007. I expect a slow recovery from this recession,” said Monson.