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NAPL Reports 'Free Fall is Over,' Industry Heading Toward Growth

June 9, 2010
PARAMUS, NJ—June 9, 2010—“Conditions in the industry have improved, but only relative to the deeply depressed levels of spring 2009,” say economists at the National Association for Printing Leadership (NAPL) in the NAPL Printing Business Conditions update released last week. “Sales are still down, but trends over the last three and six months show that the industry is headed in the right direction,” they continue, pointing out, however, that “as the economy heats up so will cost inflation, and it is difficult to pass through higher costs to customers in markets that are still very weak and intensely competitive.”

According to the report, sales fell 8.7% during the six months ending in March 2010 and 5.4% during the three months ending in March, a marked improvement over comparable numbers a year ago, when sales were down 12.1% over the previous six months and 14.3% over the previous three months. “While the six-month average captures trend, the three-month average—which was down 18.1% at the deepest point in the recession—anticipates the direction of a trend,” say the NAPL economists. “As we approach mid-year, the free fall is over and we are moving toward growth.”

Part of the NAPL State of the Industry Series sponsored by Heidelberg, the report noted that 40.8% of NAPL Printing Business Panel members said sales increased last quarter—nearly five times the 8.6% that reported rising sales in the first quarter of 2009. And, while 59.2% now still report sales decreasing, that is down significantly from the 91.4% who reported sales were down at this time last year.

The latest Printing Business Panel survey also showed improvement in business conditions, confidence, volume/output, and factory payroll hours. And the NAPL Printing Business Index™ (PBI), the NAPL Research Center’s broadest measure of activity, rose to 46.5 in April 2010 from 35.0 in December 2009. “Although still below 50.0—meaning more companies report activity is slowing down than report activity is picking up—the PBI has now doubled since falling to a record low 21.2 in March 2009,” explain the economists.

These positive signs are tempered somewhat by rising paper, ink, toner, and energy costs. Nearly two-thirds (65.7%) of the Panel members report paper prices have risen an average 5% this year, and 43.3% say that energy costs have increased an average 6.7%.

“More than four out of five (81.7%) of our Panel members are concerned that cost inflation will squeeze already thin margins,” say the NAPL economists. “They know that the cost of a broad range of materials and consumables will be rising, and, eventually, so will salaries, wages, and interest rates.

“Economic conditions make it difficult for them to pass these increases along to consumers, so slim profit margins are becoming even thinner,” they continue. “And some panelists express concerns that raising prices for any reason will drive clients away from print permanently.”

NAPL Printing Business Condition updates, based on surveys of NAPL’s 300+ member industry Printing Business Panel, are part of the NAPL State of the Industry Series, sponsored by Heidelberg, which also includes the annual NAPL State of the Industry Report and Strategic Perspective report. State of the Industry Series publications are provided as a membership benefit to NAPL corporate and associate members. For information, contact Membership Director Kristen Kitchen at (678) 594-0048, Ext. 104, or, or visit .

About NAPL:
NAPL is a not-for-profit business management association representing companies in the $80+ billion commercial printing and graphic communications industry in North America. NAPL’s comprehensive slate of business-building solutions provides company leaders with the management tools they need to make informed business decisions in an ever-changing market environment. It addresses the unique concerns of small printers through the National Association of Quick Printers (NAQP). For more information on NAPL, visit or call (800) 642-6275.


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