Commercial Printing Outlook — Tepid Vote of Confidence
“With that kind of head wind, it’s hard to imagine the economy is going to be much help next year,” the economist says. As of October, Blue Chip Economic Indicators was projecting 2 percent growth in GDP for 2007 and 2.4 percent in 2008, he notes. That’s down significantly from the corresponding 3 percent and 2.8 percent projections it released in February of this year.
Better than Forecasted
Ronnie H. Davis, Ph.D. and PIA/ GATF’s chief economist, has been surprised by the strength of the economy in 2007. “The ‘official’ PIA/GATF forecast called for a bit of slowdown to about 1.5 to 2 percent growth in the economy and 2 percent growth in nominal printing shipments this year. We’re probably going to end up at over 2.5 percent growth in the economy and around 2.5 or 3 percent growth in print markets,” he reports.
PIA/GATF does not adjust its industry sales growth figures for inflation, in contrast to NAPL, in order to talk in the same terms as printers typically think about their own sales, notes Davis. “There probably is about a percentage point of inflation in those numbers.”
Economic growth slowed considerably in the first quarter of 2007, but then picked up a little faster than Davis anticipated. “If the economy grows at 2.5 to 2.7 percent (as he expects) in 2008, print markets should grow at around 3 percent.”
Surprisingly strong export numbers have helped buoy the economy, but consumers remain the key to avoiding a recession, NAPL’s Paparozzi asserts. Along with exports, other positives, he says, include the fact that employment is still growing (albeit at a slower rate) and the consumer has been remarkably steady. “That’s why most business analysts, including NAPL, don’t expect a full-fledge recession. All it would take is a significant shock to consumer confidence, though.”