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COMMERCIAL PRINTING - A Soft Landing

December 2000
BY MARK SMITH


This New Year's Eve can't help but be a letdown. Even though purists will note that it marks the true new millennium, there is no celebration fever or Y2K bug this time around. The muted celebration is expected to set the tone for the economy in the new year, resulting in a "soft landing" from the recent record-breaking pace of growth.

"This year we expect printing sales, not adjusted for inflation, to grow at right around 5.5 percent," notes Andrew Papparozzi, vice president and chief economist at the National Association for Printing Leadership (NAPL), Paramus, NJ. "The economy will grow by 5.2 percent, which will be the strongest rate of growth in 16 years, and a continuation of what has been the strongest five-year performance since the mid-1960s.

"NAPL doesn't forecast the economy, but the consensus of most forecasters is that the economy will be slowing. The question is, how much and how fast?" Papparozzi says.

"Right now, the feeling is that the Greenspan-led Fed is going to achieve a soft landing. That is, a gradual, orderly slowing of GDP (Gross Domestic Product) growth from the 5.2 percent pace we're seeing this year to around 3.3 percent in 2001. The reason people are forecasting a soft landing is because Greenspan started to attack inflation early, before it could become imbedded in the economy, and he is operating on a relatively healthy economy."

If the soft landing is achieved as expected, the NAPL economist expects commercial printing sales growth to slow to between 3.5 percent and 4.5 percent in 2001. If the landing is rougher than anticipated, print sales will be in the lower end of that range, he reveals.

The forecast coming out of the Printing Industries of America (PIA) is a little more optimistic, at least in the case of its recent "Vision 21" study. Conducted in association with Standard & Poor's/DRI, the study predicts industry revenues to grow by 4.7 percent per year through 2003. The difference in the numbers possibly could be explained by the fact that the study's figure is a projected compound annual growth rate over a multi-year period, which involves some averaging. Papparozzi's projection is just for 2001.

There is much closer agreement when it comes to projections for the general economy. The study's findings also call for a slowing in GDP growth, in this case to 3.4 percent. (This, again, is a projected compound annual growth rate for the years 2000 to 2003.)
 

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