On December 1, 2008, the National Bureau of Economic Research said that “the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy” and what the NPES equipment shipment data has been showing since December 2006. NPES shipment data includes prepress, lithographic presses and bindery and finishing equipment sold in the U.S. The 3rd quarter shipment data came in at $361.9 million which was down 5.6% from 2007 levels. Unfortunately... that’s the good news and the bad all rolled into one. It was good that things didn’t get any worse despite the fact that the U.S. economy has clearly deteriorated, but it was bad that we didn’t get a boost from sales at drupa 2008.
We’re still looking at total year-end shipments of approximately $1.42 billion which was the outlook after the 2nd quarter data was released. If you look at Figure 1 above, which shows the quarter over quarter percentage change since our last “good” year which was 2006, you see that the rate of decline quarter over quarter is slowing, which indicates that we may be nearing the bottom. Continuing on the positive side, the 4th quarter of the year has historically been the best quarter for equipment shipments, however this may be tempered by the continued deterioration of the overall U.S. economy.
Moving to Graphic Arts Supplies shipments, which includes film, plates, proofing products and the related chemistries, the 3rd quarter totaled $262.8 million which was down 9.7% from 2007 levels.We’re looking at year-end consumable shipments to total approximately $1.1 billion, which would be 4.7% down from 2007. As we have discussed before, the long term trend with supplies has been a steady decline in the aggregate as the printing industry continues the shift from analog workflows to digital. Printers have transitioned from computer to film to computer to plate and computer to press using less consumable materials and hence, the long-term decline.
However, somewhat more disturbing is the size of the decline witnessed in the 3rd quarter. As shown in Figure 2, the 9.7% quarter over quarter decline is almost double even the largest quarterly decline of the past three years. This points to the likelihood that print volumes for the 3rd quarter took a stronger negative decline as well. PIA flash data shows traditional lithographic printing was down .7% for the 3rd quarter which one could have expected to be down by a greater margin given the NPES supplies data. This will all become clearer when final 2008 Printing Industries of America and NPES data are released.
