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2008 Hot Markets — Charting Your Course

January 2008 By Vincent Mallardi
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CONTRARY TO “economic consensus” forecasts1 that are merely opinion averages, the United States will outpace 2007 with annual growth exceeding 6.5 percent nominal (3.4 percent real) Gross Domestic Product (GDP) through the next two years. Foreign investment, immigration and productivity gains will more than offset exaggerated “crises” like sub-prime mortgages and rises in oil prices.2

Former GE Chairman Jack Welch advises the obvious: “Move up the food chain and stop complaining about the present. If residential ownership weakens, move to residential rentals.” The same applies to printing sales. Migrate to where the markets are hot and to the places and sectors underserved by our medium, its precursors and its successors.

Publishing/non-newspaper ($108B, -3 percent; with $14.3B to print, -2 percent) will remain the Number 1 print demander, although sales will be flat or declining in every segment except juvenile/adult trades, CDI and religious publishing ($3.1B to print, +3 percent). Offshore book production may decrease with the exchange rate helping domestic manufacturers.

Professional/educational books ($3.6B to print, -16 percent) will be victim of both price excesses, as students get poorer, and instructors migrate to custom digital content, which is not easily controlled or protected. Periodicals ($5.8B to print, -9 percent) are cutting back frequencies, page counts and circulations—a slow death for many full-web heatset printing plants. Other/non-traditional publishing ($1.4B to print, -11 percent) will level off as foreign-language/content publications and newspaper FSIs consolidate.

Greeting cards ($0.8B to print, -20 percent) will slide with reduced consumer discretionary spending and the challenge of e-cards. American Greetings’ foray into online photo sharing (Webshots.com) is indicative of where social expression is headed.

Number 2 banking/insurance ($3.24T, +7 percent; with $13.4B to print, -15 percent) will make a major withdrawal from our medium despite a 10 to 12 percent increase in commercial loan activity. Completed mergers in commercial banking ($9.9B to print, -14 percent) and the collapse of sub-prime lending portfolios signal substantially less signage, stationery and direct mail.

Both property/casualty insurers ($1.6B to print, -15 percent) and life insurance ($1.9B to print, -9 percent) are turning to the Internet on-the-cheap and will see almost zero growth in premium income.

Related at Number 12 is investment/brokerage ($948B, +7 percent; with $7.9B to print, -7 percent). Only robust digital printing is gaining in securities/brokerage and mutual funds ($4.7B to print, -6 percent), while direct mail, coldweb and other commercial print crash.
 

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