COMMERCIAL PRINTING OUTLOOK -- Ambiguity is Certain
"Print sales are going to finish down around 3 percent this year, which follows a decline of 3.8 percent in 2001," Paparozzi continues. "This will mark the first time since the mid-1970s that our industry's sales have declined two years in a row. The recession was much deeper for print, and recovery is going to be much slower."
In fact, the end of a recession doesn't mean the beginning of good times, the NAPL economist points out. "It simply means the economy has stopped retracting. Recoveries can be very slow and not look terribly different from the recession itself," he says.
The second, and perhaps more profound, issue is that even when the recovery hits full speed, it's not going to lift all boats, Paparozzi asserts. "Our industry has been redefined. Companies that have not prepared for the way in which it is changing, the way communications is changing, are not going to share in the growth. It's no longer enough to simply hang on until the economy and ad spending strengthen again."
Across the board, printing markets are being redefined by shorter runs, increasing use of color, personalization and growing demand for value-added services such as database management, fulfillment and mailing, Paparozzi says. "Printers that are digitally prepared have a historic opportunity to get involved in their clients' jobs earlier, stay involved longer and elevate themselves to a provider of communication solutions that satisfy a far broader range of clients' communication needs than ever before. That includes taking digital files to CD or the Web."
According to Davis, PIA's "2002 Ratios" study found that the average printer participating in the survey earned just 1 percent before tax profit on sales. Profit leaders—printers in the top 25 percent—saw their profits fall to 8 percent, which is even below the 8.9 percent achieved by profit leaders in the 1990-91 recession, he adds.