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PI 400 -- Commercial Printing - Cutting Down Times

December 2001
BY MARK SMITH


Every boom must have its bust. It's still just the nature of the business cycle, despite all the talk about the "new economy." Knowing that really doesn't make it easier to cope with a downturn, though, especially one marking the end of one of the longest periods of economic expansion in U.S. history.

But maybe it should be a source of some comfort. The U.S. economy has always shown the resiliency to bounce back, even from a depression, and printing sales have followed right along. In addition, many of the same fundamentals that fueled the expansion are still in place, working to stem the fall and ready to drive a recovery.

The problem is many people still are left with a nagging feeling that things may be different this time. The main reason, of course, is the uncertainty created by the war on terrorism and the potential for future terrorist attacks. Every business/economic forecast seems to come with a disclaimer, something to the affect: "Assuming there are no more terrorist attacks..." Obviously, that's not an assumption anyone can comfortably make.

Added to this is the unsettled feeling—or outright despair, in some cases—about the future of print that has permeated the industry. For those in attendance at PRINT 01, it was hard not to reflect a little ominously about the timing of the attacks, which came in the middle of an already nervous show.

As with the broader economy, though, the prevailing wisdom holds that the printing industry should not be counted out any time soon. Nonetheless, printers do need to be realistic about the business outlook for the future, the experts warn. That's easier said than done, of course.

"Even though it is very difficult to accurately forecast in these tough times, printers still need to develop a business plan for the next three, six and 12 months," notes Ronnie H. Davis, Ph.D., chief economist at Printing Industries of America in Alexandria, VA. "And, this plan must be based on some view of the future." Davis concedes that printers may need to develop alternative plans based on different scenarios.

"Once all of the numbers are in, they will show the U.S. economy ended up being in a recession for at least two quarters (the third and fourth quarters of 2001) and perhaps a third (Q1 of 2002)," the economist predicts. As for print sales, "the market segments most impacted by advertising and the mail—magazines, catalogs and direct mail—will be down the most. Packaging, general commercial and quick printing may be the least impacted," he says.
 

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