Hot Markets for 2007 — Prepare for Growth
DON’T BELIEVE the pundits. The U.S. economy will expand, not contract, in 2007-2008, and to an annual growth rate of nearly 4 percent in GDP. This will reverse the downward adjusted 3.2 percent in 2006 and 2005. Our industry should makeready to run forward at near the GDP rate. The reason: print growth is tied to the “knowledge economy,” which is not calculated into GDP while government, an outlay, is.
Research and development, if treated as a capital investment rather than as an intermediate expense, boosts GDP by 3 percent and the national savings rate by more than 2 percent. The U.S. accounts for 32 percent of the worldwide R&D number, and the payoff to packaging and printing will be exponential during the next two years among the Hot Markets detailed here.
A knowledge dividend will principally accrue to Number 1 publishing/non-newspaper ($112B, +3 percent; with $15.7B to print, +11 percent). The robust value proposition of digital versioning combined with special-effects offset will excite professional/educational books ($4.1B to print, +14 percent) and juvenile/adult trades, CDI and religious publishing ($3.0B to print, +14 percent).
Conversely, periodicals ($6B to print, -2 percent) will continue to decline in ad/circulation revenues, as will the number of heatset full webs. Other/non-traditional publishing ($1.6B to print, +14 percent) will be dominated by foreign language/content publications coming onshore and newspaper FSIs. Greeting cards ($1B to print, +4 percent) are losing ground to upstart e-cards as production and distribution costs of conventional printed products drive higher prices. Specialty finishers have to migrate to packaging and fancy publication covers and inserts.
At Number 2 will be banking and insurance ($3.02T, +6 percent; with $15.6B to print, +2 percent). Commercial banking ($11.6B to print, +2 percent) is the largest direct mailer and a major demander of signage, outdoor, transit, forms and stationery. Mergers will slow to smaller banks, limiting category growth, but the buyers will be foreign-based financial institutions. Name changes!
Vincent Mallardi, C.M.C. is a Certified Management Consultant in the paper, printing and converting industries, and is an adjunct professor in economics. For the complete listing of all 1,500 of the largest print buying entities, including addresses and phone numbers for all 50 states, contact him via email at firstname.lastname@example.org