NPES First-Half 2006 Data Shows Strong Growth for Equipment

NPES news

November 2006

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The data is finally in: findings for the first half of 2006 are pointing to a strong upswing in sales of printing equipment. Shipments totaled $1.317 billion for the first half of 2006, a 28.8 percent increase over the same period in 2005. This follows a good 2005 in which equipment shipments were level with 2004, but up 23 percent over 2003, which was the low point year for equipment sales in well over a decade.

The equipment data discussed here includes prepress, press and postpress/bindery equipment sales and is collected through the NPES market data program. This is actual data reported by NPES members and it is believed to represent approximately 85 percent of total equipment market in the

U.S. If this trend continues through the balance of the year, this will be the best year our members have experienced since 1998, as the data in Figure 1 illustrates.

A quick look at some of the equipment categories shows that sheet-fed press sales have led the industry growth at a whopping 70 percent increase over first half 2005.

Product type / Growth 1st half
Platesetters +2.5%
Sheetfed presses +70.6%
Web-fed presses +6.1%
Cutters -8.1%

On the heels of an extremely well attended GRAPH EXPO in Chicago and based on many discussions with members on the show floor, we believe that the second half will be strong too; however it will be difficult to maintain a 29 percent growth pace. But even if the growth rate slows somewhat, 2006 will probably hit the books as one of the best years in the last decade for sales of equipment.

Can we expect this to last?
Regardless of what the growth rate turns out to be, this is great news for our members. But you have to ask the ques-tion, can we maintain industry sales levels of $2.5 billion per year? This may be a challenge for a few reasons. First, we believe there was significant pent-up demand from over five years of declines in printing volume. Since printing sales were down, printers were not buying. Now that printing industry sales volumes have returned to 2000 levels, coupled with the fact that the equipment offerings of NPES members are more productive than ever, printers are upgrading to take advantage of efficiency improvements this new technology provides. How long will this surge from pent-up demand last?

Secondly, consolidation continues unabated in the printing industry, which equates to fewer customers for our members. Coupled with the resultant surge in used equipment on the market, this makes it tough to sell new equipment to those printers left in a shrinking marketplace. Finally, printing equipment sales are cyclical and generally follow the rise and fall in GDP. The U.S. economy is doing well, but lower growth is forecast for the coming years.