IBISWorld Report: Commercial Printing Industry Decline to Continue, But Pace to Slow

NEW YORK—March 10, 2014—The printing industry, which includes large commercial printers and local print shops, endured a variety of challenges over the past five years. According to IBISWorld Industry Analyst Omar Khedr, “Consumers are increasingly favoring digital alternatives, such as online media, over printed materials.” For many media products, printed text has become too slow and costly to produce. Moreover, during the past five years, demand for print advertisements, a key demand driver for this industry, has consistently fallen. As a result, newer forms of media, such as digital, have been siphoning demand away from this industry. Consequently, the printing industry is in decline with revenue expected to decrease at an average annual rate of 2.1 percent in the five years to 2014. In 2014, revenue is expected to decrease 2.4 percent during the year to an estimated $77.6 billion, hindered by an increase in the price of paper.

Decreasing sales volumes and downward pressure on unit selling prices have also hampered industry profit during the past five years. Printing requires substantial capital investment in new technology to remain competitive in times of excess capacity. Since there have not been enough customer orders, overcapacity has contributed to the long-term trend of industry consolidation. In the five years to 2014, the number of commercial printing companies is expected to fall at an average annual rate of 3.2 percent to 22,946 operators. Industry consolidation has allowed larger printers that have economies of scale and access to strong financing to adopt more efficient equipment, while simultaneously slashing employment and wages. Additionally, plant closures and staff consolidations have caused industry employment to decline at an average annual rate of 4.2 percent to 413,164 workers in the five years to 2014.

In the five years to 2019, the printing industry is anticipated to continue its decline, albeit at a slightly slower pace. In addition to these projected declines, industry operators will also need to contend with the higher cost of materials. “For example, the price of paper is expected to increase during this period,” says Khedr. Furthermore, substitutes to commercially printed material, such as online media, will continue to adversely affect industry activity. In order to adapt to declining demand, printers will need to diversify into cross-media products, including multimedia layout and design.

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