EDITOR’S notebook

State of the Industry

I attended two industry events recently where presentations by Ronnie Davis, Ph.D., and Andy Paparozzi—chief economists of the PIA/GATF and NAPL, respectively—reaffirmed my beliefs about the current state of commercial printing and some of the foremost challenges we face going forward.

The commercial printing industry is finally growing again.

Speaking to attendees at the annual Web Offset Association conference, Davis credits the 2.8 percent increase in U.S. printing shipments in 2004 and projected 3 percent increase this year to several factors, including overall economic growth for the U.S. economy, a rebound in advertising spending, the 2004 Presidential election and, till now, stable postage rates.

Paparozzi, who addressed some 300 printers attending Heidelberg’s recent President’s Night event, concurs that the industry continues to show signs of sustainable growth. He suggests that industry sales grew 4.1 percent last year, and have the potential for another 4.5 to 5.5 percent increase in 2005. Expectations also remain strong, with more than 40 percent of NAPL’s Printing Business Panel predicting that business conditions within their companies will improve over the next six months, and just 6.4 percent expecting business to decline. But improved conditions have also resulted in printers encountering steep price hikes for paper and other consumables, often due to higher raw material costs.

End game: Don’t lose sight that these recent positive sales gains follow a period of flat and even negative industry growth. So we’re just now back to pre-recession levels. Although the market outlook looks sunnier, don’t waver from your company’s mission to increase efficiency, productivity and sales per employee. When times get better, it’s human nature for companies to ease up and avoid making hard, but necessary, decisions. As Paparozzi says: “A rising tide will no longer lift all boats.” Also inform clients regularly about our inflationary environment in attempts to pass along added costs.

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