Printers are anticipating a bounce back in business in the current three months according to the latest Printing Outlook survey.
This is counter to their experiences in the second three months of the year where despite earlier optimism, the results were hand in hand with the economic turmoil across the economy.
After a generally bright first quarter, only 32% managed to increase output while a further 34% remained steady in output terms and 34% reported a decline in output. This meant a sizeable gap between expectations and experience. The weighted expectation had been +8; the actual findings was -2.
The federation points to the timing of Easter which meant a boost for Q1, but which acted as a drag on Q2 results. Now printers are predicting that there will be growth in volumes, 43%, while 23% expect output to fall. This is a +19 prediction, something that the BPIF says “would be a welcomed return to growth return to growth following a disappointing quarter”.
The strong first quarter is also attributed to stock building ahead of the original date for Brexit at the end of March. The hangover from this might account for the reduced need for print in Q2. Now as GDP dips in negative territory, stock building ahead of Brexit II at the end of October might underpin current optimism.
The sands are also shifting as the closures of printers spreads that volume of work around fewer remaining printers, leading to an apparent rise in output, at least for those participating in the survey. The volume of paper consumed in Q1 had increased over Q1 in 2018, but was down on the preceding three months at the end of 2018. Paper data is three months behind the BPIF.
Brexit is the biggest factor weighing on printers with 61% claiming this to be one of the three biggest business concerns. Just over half (52%) remained concerned about competitor pricing, with almost a third (34%) worried about the price of paper and board. This is down from 47% last time they were asked. the biggest issue is around sully chain security given that paper, plates and many other consumable area imported through Europe.
This is perhaps because for the first time in three years printers were suffering more from increases in the cost of energy and rises in the price of inks and coatings. A round of pay negotiations during Q2 had resulted in an average increase of 2.1% in wage packets.
Other issues mentioned included late payment and restricted access to skilled labour.
BPIF chief executive Charles Jarrold says: "Printing Outlook makes it clear that printers are concerned about the effect Brexit, and the continuing pre-Brexit limbo, is having on their clients and general confidence. There are also concerns about currency weakness, administration burdens and stockpiling complications and costs related to building up stocks, running them down and then building them up again in advance or the next deadline. Not to mention sheer frustration with the length of time this pre-Brexit period is lasting.
“We are continuing to have discussions with other industry organisations and Government to ensure that the concerns of our industry are taken into account.”
The respondents were asked their preferences on Brexit. Just over a half would prefer no Brexit (51%), 36% a negotiated Brexit and only 13% would prefer the no deal option that is currently threatened. Boris Johnson is, however, unlikely to read the Printing Outlook survey.
By Gareth Ward