Epicomm Spring Industry Update Predicts Sales Slowdown Likely Temporary
ALEXANDRIA, Va.—June 10, 2015—“Business has slowed significantly across our industry,” noted Epicomm Senior Vice President and Chief Economist Andrew Paparozzi in the Spring 2015 State of the Industry Update, which was provided quarterly to members of Epicomm, the Association for Leaders in Print, Mail, Fulfillment and Marketing Services. But, he added, “The majority of companies we survey believe the slowdown is temporary. And so do we.”
In the four-page Update, part of the State of the Industry Series sponsored by Canon, he points out that industry sales grew 3.4 percent from fall 2013 through summer 2014 without interruption―the industry’s strongest growth since 2007. During the same period, employment rose 0.5 percent, the first increase since 1998.
But sales growth slowed to 0.2 percent during the last quarter of 2014 and increased just 0.7 percent in the first quarter of this year, while employment fell 0.8 percent. The reasons, writes Paparozzi, are twofold: “the severe winter of 2014-15 and an abrupt slowing of the economy. The first is finally behind us. The second is the question mark.”
Nonetheless, for a variety of reasons outlined in the Update, Paparozzi expects the economy to pick up during the second half of 2015, “with GDP at least matching last year’s 2.4 percent advance and maybe even hitting 3.0 percent for the first time in a decade.”
His optimism appears to be shared by the State of the Industry Survey participants whose confidence has not been materially affected by the disappointing start to 2015: 32 percent now expect business to improve over the six months ahead, only fractionally lower than 32.3 percent last August, while just 4.7 percent expect business to decline, down from 6.8 percent last summer.
“We still expect total industry sales from all sources, not just printing, to grow 2.5 percent to 3.5 percent this year, after rising 2.4 percent last year,” said Paparozzi. “A stronger first quarter would have increased the likelihood of finishing in the upper half of that range; now the odds favor a finish in the lower half. Either way, we will have our best back-to-back years in a long time.”
Nonetheless, he cautioned, “We will not, however, grow fast enough to meaningfully ease the pressure on prices and profits. Just 38.2 percent of the companies we survey report prices are higher and just 34.8 percent report profitability is higher than it was last spring.”
On the employment front, 40.3 percent expect to increase employment over the next six months, up from 33.6 percent at this time last year, while just 4.7 percent plan to reduce employment, down from 12.7 percent one year ago. At the same time, more than one-third (37 percent) of survey respondents report they are under pressure to raise wages and salaries and nearly 16 percent report challenges such as increased employee turnover, greater difficulty recruiting and retaining experienced personnel, and greater difficulty recruiting and retaining entry-level personnel.
The Spring 2015 State of the Industry Update also includes a discussion of key actions companies are taking to improve performance and profitability, including a list of the 25+ top steps companies are taking to ensure that their 2015 results are better than those of 2014, ranging from being more environmentally friendly/more sustainable (4.6 percent) and revamping their sales compensation program (6.1 percent) to controlling costs/doing more with less/reducing spoilage, rework and waste (61.7 percent) and trying new approaches to marketing (67.9 percent).
The State of the Industry Update newsletter, issued three times a year and annual State of the Industry Report are provided as a member benefit to all Epicomm Level II and Level II+ members, as well as all associate and educational members.
For information on Epicomm economic and trends reports, contact Andrew Paparozzi at (201) 523-6353 or apaparpozzi@epicomm.org. For information on Epicomm membership and member benefits, contact Donna Komlo at (201) 523-6345 or dkomlo@epicomm.org.
About Epicomm
Epicomm, the Association for Leaders in Print, Mail, Fulfillment and Marketing Services, is a not-for-profit business management association representing companies in the $80+ billion graphic communications industry in North America. It provides industry advocacy, management training and a comprehensive slate of business-building solutions for companies in an evolving market environment. It was created in 2014 through the merger of the Association of Marketing Service Providers (AMSP) and the National Association for Printing Leadership (NAPL)/National Association of Quick Printers (NAQP). Its founding associations have some 200 years of combined experience serving graphic communications companies of every size and specialty. Epicomm headquarters is at 1800 Diagonal Road, Suite 320, Alexandria, VA, 22314. It also maintains offices at One Meadowlands Plaza, Suite 1511, East Rutherford, NJ, 07073.
Source: Epicomm.
