Hot Markets for 2005 -- Remaining Opportunities
June 2005
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by Vincent Mallardi, C.M.C.
Energy price hikes are tanking economic energy. Real GDP, net of fuel and power, is zero, which means any growth in '05 will be in the second half. Printing sales are up at a nominal 6 percent pace, but with less value-added because of energy-related inflation in paper, electricity and freight costs.
Most benefitting from the present 4.3 percent inflation rate at the consumer level is banking/insurance ($2.68T, +5 percent; with $14B to print). Commercial banking ($>9B to print, +21 percent) is cashing in on the tougher federal bankruptcy law and lesser restrictions for charge card issuance. Bank on more direct mail, especially from sub-prime lenders. Property/casualty insurers ($2.8B to print, +6 percent) are repairing tarnished images, as at AIG, and reigning in increased coverage premiums, both print-intensive.
Non-newspaper publishing ($103B, 0 percent; with $13.9B to print, -17 percent) continues to lose share to the Internet and electronic publishing. Periodicals ($49B, -4 percent; with $<8B to print, -9 percent) are migrating content, if not advertising, to new media, and are cutting trims, run lengths and page counts. More than 100 heatset web plants may close this year.
Other publishing, in particular non-traditional books ($>2B to print, +13 percent) and adult trades ($8B to print, +7 percent), are best-sellers for integrated specialty book manufacturers.
At Number 3, medical products/pharmaceuticals ($339B, +4 percent; with $11.4B to print, +6 percent) will return to health in the second half-year. Pharmaceuticals and wellness ($154B; +9 percent; with $6.4B to print, +10 percent) will double print spends in ROP and bind-in placements, POP and packaging. Medical products ($140B, 0 percent; with $3.4B to print, 0 percent) and biotechnology ($45B, +5 percent; with $0.8B to print, +6 percent) are lagging.
At Number 16 is healthcare ($1.87T, +5 percent; with $ 5.3B to print, +7 percent). Health insurance ($328B, +6 percent) and third-party administration ($251B, +5 percent) could admit $3B in printing invoices, about 15 percent or more than in 2004. Hospitals ($663B, +5 percent) are energetically consolidating, with branding and marketing that will release a $2B print spend in the New Year. Non-hospital care ($161B, +4 percent) will emerge as a big print media spender for imaging centers, endoscopy suites, home care, and other outpatient and ambulatory providers.
Number 4-ranked computer software ($315B, +2 percent; with $10B to print, -2 percent) will boot up in packaged software ($52B, -7 percent) as Microsoft launches its biggest ad campaign—not for the "Longhorn" product to debut next year, but to defend Windows 2000. Meanwhile, network and mainframe computing ($112B, +10 percent) is outperforming all forecasts, as with Juniper Networks doubling revenues in Q1 '05. Hosting and memories and storage ($130B, 0 percent) are stalled except for Yahoo and Google.
Energy price hikes are tanking economic energy. Real GDP, net of fuel and power, is zero, which means any growth in '05 will be in the second half. Printing sales are up at a nominal 6 percent pace, but with less value-added because of energy-related inflation in paper, electricity and freight costs.
Most benefitting from the present 4.3 percent inflation rate at the consumer level is banking/insurance ($2.68T, +5 percent; with $14B to print). Commercial banking ($>9B to print, +21 percent) is cashing in on the tougher federal bankruptcy law and lesser restrictions for charge card issuance. Bank on more direct mail, especially from sub-prime lenders. Property/casualty insurers ($2.8B to print, +6 percent) are repairing tarnished images, as at AIG, and reigning in increased coverage premiums, both print-intensive.
Non-newspaper publishing ($103B, 0 percent; with $13.9B to print, -17 percent) continues to lose share to the Internet and electronic publishing. Periodicals ($49B, -4 percent; with $<8B to print, -9 percent) are migrating content, if not advertising, to new media, and are cutting trims, run lengths and page counts. More than 100 heatset web plants may close this year.
Other publishing, in particular non-traditional books ($>2B to print, +13 percent) and adult trades ($8B to print, +7 percent), are best-sellers for integrated specialty book manufacturers.
At Number 3, medical products/pharmaceuticals ($339B, +4 percent; with $11.4B to print, +6 percent) will return to health in the second half-year. Pharmaceuticals and wellness ($154B; +9 percent; with $6.4B to print, +10 percent) will double print spends in ROP and bind-in placements, POP and packaging. Medical products ($140B, 0 percent; with $3.4B to print, 0 percent) and biotechnology ($45B, +5 percent; with $0.8B to print, +6 percent) are lagging.
At Number 16 is healthcare ($1.87T, +5 percent; with $ 5.3B to print, +7 percent). Health insurance ($328B, +6 percent) and third-party administration ($251B, +5 percent) could admit $3B in printing invoices, about 15 percent or more than in 2004. Hospitals ($663B, +5 percent) are energetically consolidating, with branding and marketing that will release a $2B print spend in the New Year. Non-hospital care ($161B, +4 percent) will emerge as a big print media spender for imaging centers, endoscopy suites, home care, and other outpatient and ambulatory providers.
Number 4-ranked computer software ($315B, +2 percent; with $10B to print, -2 percent) will boot up in packaged software ($52B, -7 percent) as Microsoft launches its biggest ad campaign—not for the "Longhorn" product to debut next year, but to defend Windows 2000. Meanwhile, network and mainframe computing ($112B, +10 percent) is outperforming all forecasts, as with Juniper Networks doubling revenues in Q1 '05. Hosting and memories and storage ($130B, 0 percent) are stalled except for Yahoo and Google.
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