Commercial Printing Outlook : New Year, Similar Outlook
In comparing the 2007-09 and the 1981-82 recessions, there is a “tremendous recovery gap,” he says, which has resulted in lower growth of around two to three percentage points in Gross Domestic Product (GDP), or approximately $300 billion to $450 billion in lost output and millions of lost jobs.
“The pace of economic growth in the first half of 2011 was dismal—0.4 percent in the first quarter and 1.0 percent in the second quarter,” he continues. “The recovery picked up in the second half of the year, with the preliminary growth rate for the third quarter estimated to be 2.5 percent. Most likely, the economy will end 2011 with a full-year growth rate of around 2 percent.”
PIA’s estimate calls for printing shipments to finish 2011 up about 3 percent on a nominal basis (not adjusted for inflation, which has been running in the 3.5+ percent rate for much of the year) and end the year at $148.9 billion, according to Davis. That is still well below the industry peak of $174.6 billion in annual shipments recorded in 2007, he notes.
“At the current time, I believe the economy will continue a slow recovery from the recession. While a return to recession is very possible, especially since the recovery has been so tenuous, the most likely scenario is for economic growth of around 3 percent in 2012. The largest unknown, of course, is the outcome of the national elections of 2012 and their impact on federal tax and spending policies—both over the short and long term,” the chief economist adds.
If the economy trends as projected, Davis expects the overall print market to continue its current grow trend, with the 2012 national elections providing some additional boost. “All in all, our projection is for total printing shipments to increase around 3 percent (on a nominal or non-inflation adjusted basis) in 2012, or to approximately $153.4 billion.”