2005 COMMERCIAL PRINTING outlook — A Win-Lose Proposition
BY MARK SMITH
Business is looking up for the commercial printing sector; too bad it has so much ground to make up. Even as the industry’s recovery takes hold and grows, it’s clear that challenges remain and there have been permanent changes in the competitive landscape.
Putting aside personal political views, the re-election of President George W. Bush and the strengthening of a Republican majority in Congress sets clear expectations for the direction of business-related developments in the coming year.
“It does take away some uncertainty,” agrees Ronnie H. Davis, Ph.D., and chief economist at Printing Industries of America (PIA) in Alexandria, VA. President Bush’s re-election “will have a positive impact on the economy in general and, hopefully, on advertising, which will help printing,” he adds.
The PIA economist expects 2005 to ring in an economic growth rate of around 3.5 percent, with low inflation and low interest rates. As a result, the unemployment rate should continue to trend downward, he says.
Davis expects 2005 to be a good year for printing on the whole, but he does see some potential for rising paper prices and, heading into 2006, postal rate increases to impact the industry’s performance. Global printing competition, particularly from China, is also a growing concern, the PIA economist notes.
With the economy continuing to grow in the 3 percent to 4 percent range, printing shipments should expand by 3 percent next year, Davis estimates. Toner-based digital printing and ancillary services each should grow in excess of 4 percent.
According to the most recent PIA/GATF Quarterly Print Market Survey, overall print sales for the first nine months of 2004 were up 4.2 percent compared to the same period of 2003. Toner-based digital printing and ancillary services grew even faster, at 6 percent and 4.9 percent, respectively.