U.S. Printing Industry to Continue to Decline at Slower Pace Says IBISWorld Report
LOS ANGELES, CA—Sept. 4, 2012—The U.S. printing industry has contended with a variety of challenges over the past five years. Consumers are increasingly favoring digital alternatives, such as online media, over printed materials.
“For many media products, the printed word has proven to be too slow to produce and too costly to distribute,” reports IBISWorld Industry Analyst Caitlin Moldvay. “As a result, newer forms of media have been leeching away this industry's demand.”
With revenue declining at an average annual rate of 6.2 percent in the five years to 2012, the printing industry as a whole is in decline. In 2012, revenue is expected to continue declining, falling 2 percent to an estimated $76.6 billion.
Over the past five years, decreasing sales volumes and downward pressure on unit selling prices have hampered industry profit margins. “Further crippling the industry, printing requires substantial capital investments in new technology to remain competitive, even at times of excess capacity,” adds Moldvay. “Such overcapacity has led to industry consolidation.”
In the five years to 2012, the number of firms operating in this industry is projected to have fallen an average of 2.2 percent annually to 26,176. The printing industry is highly fragmented, with privately-owned firms comprising the majority of commercial printers. Throughout the last three decades, there has been an increase in market share concentration due to mergers and acquisitions.
Plant closures have caused industry employment to fall at an average of 4.5 percent annually to 463,904 employees in the five years to 2012.
The printing industry is projected to continue its decline in the five years to 2017, though at a slower pace.
• Substitutes to commercially printed material, such as online media and advertising, will continue to adversely affect industry activity.
• The industry is expected to continue consolidating due to overcapacity and the rapid pace of technological change, and rising barriers to entry and increasingly strategic and complex relationships with customers will contribute to this consolidation over the next five years.
• The industry will also continue to struggle as digital media replaces paper products. In order to adapt to declining demand, printers will diversify into cross-media products, including multimedia layout and design.
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