Over the last two years, industry experts and innovators have been cautiously optimistic about the market’s recovery, but many point to 2011 as a transition year. The Innovator’s Panel survey really showed the uncertainly in the market, but the future outlook seems positive. While only 30 percent of respondents felt the current market was faring better than 2010, 43.75 percent indicated it was “the same as expected” while the remaining 26.25 percent indicated it was “worse than expected”.
Looking ahead, however, to the close of the year, panelists were more optimistic, with 36.35 indicating the year would end “better than expected” and another 41.25 percent predicting it would end as expected.
“I see 2011 as a transitional year, where companies that survived the economic downturn began reinvesting in their businesses,” said Patrick Ryan, general manager, Seiko Instruments USA.
Sal Sheikh, vice president, marketing, Océ North America, offered similar sentiments. “2011 will be marked as a year of transition. Many companies have weathered the financial impact of the rough economy and have diversified their business models to adjust with the technology and the changing markets. The economic conditions have forced many companies to reinvent themselves. However, many realize they must invest in new technology to remain competitive in the services they offer to their customer base.”
“We estimate the overall sign and graphics industry will likely end 2011 up around three percent over 2010,” said Monson. “Of course, the industry is made up of those companies with significant growth and those whose sales are flat or in decline. Price competition, commoditization of certain products, and margin pressure continue to challenge the industry. We anticipate that the industry will see further consolidation as some ‘print for pay’ providers that do not have the cash reserves, access to credit, or do not innovate to expand into higher margin products and services make the decision to exit the business. It will be those organizations that have made the harder, right decisions and taken the necessary steps to control expenses, maintain cost of goods, and have focused on higher margin business that will benefit as the economy continues its fragile and uncertain recovery.”
But will the market every get back to pre-recession highs? The Innovators panel was positive the market would rebound and recover, with 45 percent indicating it would, 37.5 percent uncertain, and 17.50 percent indicating it would not get back to those pre-recession sales numbers.
The real question, though, was brought up by Messina. “We will make it back to pre-recession sales numbers, but the real concern is, whether or not we will get back to pre-recession profits.”
As we know, economies are cyclical and fluctuations should be anticipated. “Sometimes we forget that every recovery still has some measure of peaks and valleys. Despite that, we do anticipate that, in the long term, we are in for an extended growth period,” said Scrimger. “That growth curve may not be as steep as we like—it never is—but if we hold the lessons of the past few years close to our strategy, we can come out of this more profitable and more nimble.”
“While I don’t think anyone has the foresight to understand exactly what volumes are possible, the economy will dictate what equipment is purchased over the next 12 months,” said Reed Hecht, product manager, Professional Imaging, Epson America, Inc. “I think we are about to see a resurgence in sign and graphics as companies look to replace older, outdated equipment in favor of new technology and more versatile equipment that will allow them to produce higher-quality output as well as extend their offerings to accommodate new markets they may not have been able to address previously. Strategic investments in hardware are critical to sign shops looking to stay ahead of the competition down the street.”
“Despite the rate of growth progressing slower than many in the sign and graphics market would like, sales numbers seem to be steadily climbing. Although the industry has yet to return to pre-recession numbers, we expect to see a more rapid rate of growth once the uncertainty about the economy diminishes,” said Ed McCarron, director of sales and marketing, InteliCoat Technologies.