Q3 Paper Outlook — Waiting for the Rebound
A recent report by the Publishers Information Bureau (PIB) and the Magazine Publishers Association of America (MPA) found that magazine advertising revenues for the month of March closed at $1,377,102,513, only a 1.7 percent decrease from last year. Year-to-date, advertising revenues decreased 6.3 percent, closing at $3,286,776,734, and total ad pages were 46,624, down 14 percent over the last year.
Even so, ad pages only declined by 10 percent from March 2001. January's drop in demand was 15.9 percent from January 2001. The PIB tracks advertising pages and revenue for 215 magazines and five Sunday magazines.
Five of the major advertising categories showed positive dollar growth this March. Gains were noted in food and food products, automotive, drugs and remedies, direct response, as well as media and advertising. Losses were most notable in the financial, insurance and real estate, transportation, hotels and resorts, apparel and accessories, technology and household furnishings sectors.
"Overall, the March declines are not as dramatic as those in recent months," notes Ellen Oppenheim, executive vice president and chief marketing officer at the MPA. "We hope that this signals the beginning of an advertising uptick."
In the long term, the consensus seems to be that, until the economy can find its way back on track, the trend of depressed paper pricing will continue.
"With commodity uncoated grades, we see some firming and those mills trying to hold the price," adds Conley. "And, as soon as the economy starts moving again, we will see some increases. In the coated arena, we don't see much changing. Imports will help keep pricing low, and until Europe and Asia get their economies going we can enjoy the pricing of this soft market for a while longer."
In general, printing and its related industries are still going through this latest round of "economic purging," he says. As printing companies continue to close or consolidate, and demand remains the same or continues to drop, suppliers will have to respond likewise.