The printing industry has recorded its fifth consecutive quarter of growth in the second three months of this year according to the BPIF’s Printing Outlook survey. And there is optimism for the rest of the year, starting with the current quarter when slightly fewer expect growth, but more than anticipate that sales will shrink.
This is perhaps in contrast to Bank of England warnings of impending recession and a decision to raise the base rate. The BPIF carried out its survey before the Bank’s announcement, so findings predate its dire forecast.
For the BPIF, printers appear to be coping. Half report that output increased in Q2, 36% state that output remained steady with 13% reporting a fall. And for the current quarter, 47% expect output to be stable, 36% that there will be growth in output with 17% braced for a fall.
This comes despite problems with the supply chain, rising energy costs, increase substrate prices and growing wage pressure to cope with.
The latest government data shows that in 2021 the overall revenue for the printing industry was 9% higher than in 2020. This is above the rate of recovery for the economy as a whole, but as the BPIF points out, the industry lunged to deeper depths in 2020 than the economy as a whole.
Recovery has continued into this year. Industry turnover in March was 19.8% compared to the same month in 2021, and 14% higher than the same month in 2020, the last pre lockdown month.
March was followed by a drop in output in April and a recovery in May. Current forecasts suggest that June and July will be marked by growth compared to 2021 with expectations of a drop in output in August. The BPIF predicts that UK print will achieve a turnover of £14 billion.
The BPIF has asked printers about constraints on capacity, reckoning that in all these amount to a 14% block on what might have been possible. The main issues according to those participating are challenges in finding skilled workers, then the timely delivery of consumable materials, a lack of unskilled staff and rising energy costs. Staffing issues have been impacted by absenteeism caused by continuing Covid infections.
The biggest issues printers face do not include undercutting by rivals, but with only a few percentage points between them, energy costs, rising substrate costs and wage pressures. Few companies anticipate adding to their headcount over the rest of the year.
More companies are in distress according to analysis by Begbies Traynor. It reckons that just 32 printers were involved in some kind of winding up procedure during Q2.
