PI 400 -- Commercial Printing - Cutting Down Times
"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.
Overall, the economy should climb back to an annual growth rate of 3 percent by the second quarter of 2002, resulting in a 2.5 percent growth rate for the entire year, Davis projects—assuming there are no "additional significant terrorist acts." He expects print markets to grow by only 2 percent for the year.
Even though printing sales no longer grow at the same percentage rate as GDP, they do still generally move in step with the economy through both up and down cycles, Davis says. "But printing sales as a whole take a little longer to recover since much of the business is based on advertising spending."
A similar set of expectations are contained in "The NAPL 2001-2002 State of the Industry Survey" report put together by Andrew D. Paparozzi, vice president and chief economist at the National Association for Printing Leadership in Paramus, NJ. "The diminished confidence and heightened risk and uncertainty that have accompanied the September tragedy will weaken the economy considerably into 2002," Paparozzi asserts. "But around the middle of next year things are likely to change, largely because the talk in Washington has changed."
Focus Has Changed
Prior to September 11, the discussion in Washington, DC, was about maintaining budget surpluses and paying down the national debt, the economist notes. The focus now has shifted to stimulating the economy, potentially by accelerating and expanding last spring's personal income tax reductions, extending tax relief to businesses and cutting capital gains taxes, he says.