Printers Enjoyed a Strong Q3 with Improved Sales, Employment, According to Latest Semper Report
BOSTON—October 29, 2014—Heading into the 4th quarter there was stunning improvements amid some market unrest. "In the 12 years we have been conducting our survey, we have never before seen ZERO respondents reducing staff."—the Semper International Fourth Quarter Economic Insight Survey revealed.
Semper International, the leading placement firm for skilled help in the graphic arts and printing industry, will shortly publish its quarterly survey offering estimates of trends in the printing and graphics industries—something it has done since 2003. In a preview of findings released to Printing Impressions, evidence shows that printers had an exceptional third quarter, with top companies showing marked improvements in both sales and profitability.
Key Insights from the Semper Report
If, last quarter, Semper was witnessing an industry on the cusp of change, the past three months clearly show that the printing industry has undergone an abrupt shift. A 90 percent increase in company profiles, strong sales expectations and a survey first—zero layoffs—all spell improved economic health among our responding companies and a new competitive labor market.
Insight 1: Quarterly Revenues Rose Again – Reaching 20 Percent Growth since Last January
One of the strongest signs of printer’s economic recovery lies in the third quarter revenue data—which continues to show steady improvement throughout the year.
This quarter, revenue tops out above the 500 mark at 55 percent, a 20-point rise from the 35 percent firms reported in our first quarter survey. While Semper is encouraged by our positive responses, if the unsettled markets impact holiday spending or the international economy remains on the rocks, we may see some of these dramatic improvements backtrack a bit before settling into a sustainable growth pattern.
Question: How does this [your revenue] compare to last quarter?
Insight 2: Nearly 90 Percent of Companies Reported Positive Profits
Company profitability set a report record for the second quarter in a row, continuing their steady march upward to the 86 percent profitability mark—a percentage point improvement over last quarter’s record high, and a 21 point improvement since the first quarter of the year. That means that both overall revenues and firms’ reported profits rose over 20 percentage points in just nine months.
This data is clearly positive, although other Semper data shows that companies are currently taking advantage of the demand increase and rebuilding balance sheets, rather than taking these profits and re-investing in hiring or new capital investments.
Question: Did your company have a profitable first quarter 2014?
Insight 3: Despite Bottom-Line Gains, Capital Investment Fell
Semper’s capital investment data is one of the more troublesome statistics in this quarter’s survey. Despite impressive increases in profits and sales, capital investments among print companies actually fell one point this quarter to 27 percent. With less than 1/3 of all firms making new equipment purchases in recent months, this low investment rate suggests that companies remain hesitant to make equipment purchases until some of the volatility ends.
Question: Did you make a major equipment purchase this quarter?
Insight 4: A Big Hiring Bump, And a First for Layoffs—Zero Turnover!
Semper’s hiring data showcased a first for the twelve years of its survey: For the first quarter in its survey history, not one single company planned to reduce their staff. Coupled with nearly 50 percent of companies reporting plans to hire this quarter, this impressive zero-turnover statistic is a strong indicator that the labor market is tighter
and increasingly competitive.
Semper is finding this across the industry, as the first time in a decade it is experiencing a significant labor shortage. For responding companies, this means that they need to correspondingly change the way that they think about attracting staff—as firms come in competition with other industries and more aggressive salary demands.
Question: What are your current hiring plans?
Putting it All Together
Clearly this past quarter was spectacular. What remains to be seen if macro-level pressures will create an ensuing negative drop through the end of the year.
Amid all the strong data, the report launch coincided with a full 10 percent drop in the NASDAQ off its 52-week high. Other telltale signals of economic softening include dropping consumer confidence data, a $20-per-barrel fall in oil prices from recent highs and strong concerns that the economic malaise plaguing Asia and Europe will travel across the pond.
Despite this unsettled climate, Semper found extremely positive outlooks towards spending and hiring from responding companies. These numbers suggested that while some firms witnessed a September slow-down, this will be a soft spot and not a contraction.
In all the years Semper has been conducting its survey, the organization has never before seen zero respondents reducing staff. Profitability also was strong, hitting a survey-high of 86 percent. Finally, the responding companies reported improved revenue growth for each of the past three quarters.
A few worrisome signals remain on the horizon. While September is often the busiest month of the year, both Semper’s question on recent sales and sales projections showed that many companies have adopted a wait-and-see attitude, with most expecting the same sales volume this quarter versus expecting further growth.
Clearly this past quarter was spectacular. What remains to be seen if macro-level pressures, such as the end Fed-supported Quantitative Easing and international market instability international will create an ensuing negative drop through the end of the year.
For complete copies of the study, readers can access www.semperllc.com/index.cfm?page=president. To participate in future quarterly surveys, please e-mail always@semperllc.com.
