The revenue of the UK printing industry shrank 19% during 2020, from its total of £14 billion to £11.6 billion, the BPIF reports in its latest Printing Outlook survey. And while there has been a 8-9% bounce back this year, the total revenue across the sector, including packaging, will only reach £12.6 billion by the end of the year.
The findings from the printers are supported by paper consumption. There had been a rise of 10% in tonnage in Q2 this year compared to the depths of lockdown in 2020, which, when newsprint is removed, becomes a 20% increase.
In short there has been a recovery since the first lockdown and confidence has replaced the despair of those long months last year. Print volumes rose during Q3 and those surveyed are confident that volumes will rise again during the final three months of this year.
This is tempered with concern about rising paper and consumable costs, a shortage of skilled labour and rising energy costs. The industry has been able to increase prices to ease the pressure on margins.
However, while trade is improving quickly, capacity utilisation remains below 2019 levels.
Only 2% were working below 50% capacity in October, with 26% saying they are operating at 80-89% of capacity. This is above the previous quarter, inline with expectations then that volumes would increase.
Some 59% of the sector says it increased output during the quarter, with 33% saying that output levels had remained steady. During October, 48% said they were expecting an increase in output and 42% had expectations that volumes would be steady, leaving 10% with expectations that volumes would drop.
The return to normal is seen too in a sharp reduction in work from home practices and in the numbers of sales executives on the road. In Q3, 77% reported that sales staff were on the road, up from the previous quarter. The survey did not ask whether any of the changes in sales communication necessary during lockdown might remain.
Likewise, 93% of companies, up from 66% in Q2, are allowing site visits by customers. By the end of the year, all being well, only 2% will be restricting these visits.
If the pandemic continues to exert and influence, Printing Outlook believes that the negative impact of Brexit is passing. Although concerns about supply chains and the loss of a labour pool remain. More than half anticipate some benefits from Brexit: this lies in opportunities for reshoring work for 39%, a rising inclination to Buy British according to 24% and expectations of government support for 16%.
