23 February 2020 Business

Brexit fears linger as pricing becomes industry's No1 issue

The BPIF's Printing Outlook survey uncovers a measure of returning confidence after consecutive quarters when the industry found the going tough.

The election and decisions over Brexit have brought a measure of relief to the industry, according to the latest edition of the BPIF’s Printing Outlook survey.

Instead of being the issue that most concerns printers, Brexit slipped to second position below the perennial of competitors pricing below cost. As many as 61% of those responding mentioned this as a problem while Brexit is only a concern for 38% followed by the difficulties in recruiting skilled people, worth a mention from 26% of those involved.

Production of election material had helped with volumes in the final months of the year. Consequently, the quarter was not as poor as most had feared. However it was still the worst for seven years.

Most anticipated a pick up in the current quarter, though negative pressure on pricing persists, even if there are signs of a return to stability after two negative quarters. Nevertheless 74% will not be able to increase prices in Q1.

This is born out by figures from the paper industry, finding that year on year consumption in Q3 had dropped 15.2% while in the same quarter to quarter comparison, ink volumes fell 7.8%.

If a shortage of skills is a problem, there are indications that printers are attempting to grow their own talent with 95% expecting to invest in training this year. However, the survey does not ask about engagement of apprentices, so training may cover on job training for existing staff.

A bright point highlighted by the report is that there are reports of companies developing new products for existing customers and about restructuring which may alleviate some of the pricing problems.

It is a good indicator that printers are being proactive about their future. As is standard at the start of a year, particularly a Drupa year, there is optimism about investment. Sentiment towards output, orders, business confidence, exports and employment are all trending upwards with only the outlook for margins in negative territory, though improved from Q3.

BPIF chief executive Charles Jarrold, comments: “The UK printing industry is not alone in having had a difficult 2019. However, the latest Printing Outlook survey highlights that 2020 has started with a bit more certainty and some signs of returning confidence.

“Orders, output and confidence are all forecast to improve. Notably, the Brexit landscape has changed and sentiment has become much less negative. It is also very encouraging to see that the printing industry has positive investment intentions for 2020.”

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The latest Printing Outlook report from the BPIF finds reasons for optimism amid the gloom. It follows two of the worst quarters for trading in recent years. But with a stable government in place, confidence is returning.

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