In the just-released Spring edition of the Printing Business Conditions report, National Association for Printing Leadership (NAPL) economists note that industry sales increased in 2012 for the first time in five years, but the gain was very modest, and a combination of economic and competitive conditions will likely continue to limit overall industry sales growth this year.
According to the report from the NAPL Research Center, sales grew just 0.6% in 2012 (from all sources, not just printing), although 1.4% growth in the fourth quarter was a significant improvement over a 0.4% decline in the first quarter of 2012. While the annual growth was small, seeing positive growth in three of four quarters in 2012 was encouraging when viewed against declines in 13 out of 16 previous quarters, stretching back to the first quarter of 2008.
The report, part of the NAPL State of the Industry Series sponsored by KBA, notes that printers’ expectations for the rest of 2013 are equally modest. Slightly more than one quarter (27%) of the association’s research group expect business to improve over the next six months (up marginally from 24% last fall), but 18% still expect it to decline and 36.6% think it will stay around current levels over the period.
“A so-so economy and continued stiff price competition will limit our industry’s sales growth—from all sources, not just print—to 1.5% to 2.5% this year,” note NAPL Senior Vice President and Chief Economist Andrew Paparozzi and Senior Economist Joseph Vincenzino, authors of the report. “Our expectations for total sales: $79.2-$80.0 billion in 2013.”
That figure is “up from $77.6 billion in 2011, but down more than 19% from the pre-Great Recession total of $98.2 billion,” they explain. And it’s down nearly 21.0% from the industry’s all-time high of $101.0 billion, reached in 2000.
“Of course, the industry’s performance is neither a ceiling—many companies will far exceed it—nor a floor—many companies will fall far below,” they write. “While the economy can influence where industry sales wind up, on a company-by-company basis the drivers for growth still will have to be generated internally.”
The economists also pointed out that although 26.3% of those surveyed plan to hire by midyear—more than double the 10.8% who are planning to cut staff—62.9% say they won’t do either until they have a much better idea of where business is growing.
The full report, including a list of the top 10 actions survey respondents believe will be most important to company success over the next two to three years, is mailed to NAPL members as a benefit of membership.