HOT MARKETS AT MID-YEAR — ECONOMIC DEFICIT DISORDER
Wrong are the economists. Home-owners are continuing to buy, sell and upgrade because it’s their only common investment option. And, after fixing up primary residences, some one-fifth are buying condos (+29 percent) or other second properties, especially among those “baby-boomers” who have recreation and retirement in mind.
Therefore, #4 Real Estate ($1.9T; with $11.9B to print, +19 percent) and #14 Home Improvements ($908B; with $7.5B to print, 0 percent) are purchasing some $4.6B worth of business forms/digital sheets, $3.3B of catalogs/directories and $3.1B of POS/outdoor. Hurricanes, past-year and predicted, have prompted the recent settlement of the softwood lumber dispute with Canada.
In the driveway, though, there’s lesser interest in improvement. Automotive ($1.7T; with $8.4B to print, +4 percent), at #9, is idle in both print and sector revenues. The only growth segment is finance and insurance (+5 percent), though off-road vehicles (-18 percent) are coming back, notably in construction and farm machinery. Business forms, dealer signage, brochures, instruction and parts manuals (in multiple languages), decals and other OEM items are immediate sales opportunities.
The politics of fear are dreadful enough, but #25 Federal/State Governments ($4.3T; with $2.9B to print; -20 percent) are scarier. Many states are running deficits, and Congress has raised the federal public debt “ceiling” to more than $10T at over 75 percent of GDP. Worse, it is spending the borrowing “power” this fiscal year.
There’s no provision for covering entitlements as the baby-boomers retire, and all social costs are rising. GPO and other government procurement of printing are slashed, and electronic alternatives are being mandated. Education (+17 percent), though, is benefitting book manufacturers through ambitious programs like “No Child Left Behind” and new initiatives in math and science.
Defense and homeland (+11 percent) is no longer print-intensive, but its private sector equivalent is. Ranked #13, Security ($480B; with $7.5B to print, -8 percent) is tight, sales-wise, but is improving with imminent scientific applications. Nanotechnology and biometrics are finding their way to smart (and clean) pressrooms and binderies. Product and personal identification (+20 percent) will be over this sector’s print spend by 2007. Got UV?
Vincent Mallardi, C.M.C., is a the chairman of the Printing Brokerage/Buyers Association International (PBBA) and is a Certified Management Consultant in the paper, printing and converting industries. He is also an adjunct professor in economics. Contact him via email at firstname.lastname@example.org