30 May 2019 Business

Printing Outlook lifts the gloom

The industry fared better than expected during the first quarter of the year, but this may not continue says the BPIF's Printing Outlook survey.

The UK printing industry is proving more resilient than the flow of closures and warnings about recession might suggest.

In the first three months of the year output fell according to the BPIF’s Printing Outlook survey, but this is expected at this time of year, and the dip was not as marked as most expected. Forecasts for a growth in business in the second quarter are however, described as “subdued”.

The survey reported that 43% had increased output in the first three months with one in four reporting a fall in output. The BPIF notes that “there appears to have been some polarisation in growth outcomes” saying that while more companies had reported expansion, more than usual had reported shrinking business.

The federation cautions that as Easter fell in Q2, the period included full working weeks which will distort the figures for the first two periods, strengthening the one and weakening the other. This might account for the subdued predictions for the current period. A further 25% anticipate a drop off while 33% expect to see growth. Nevertheless this is positive balance that is greater than last year.

For only the second time, pricing by competitors has been pushed from the top of printers concerns, to be replaced by Brexit. The result of the European elections and defenestration of Theresa May will not have eased those concerns. Around half of printers have some kind of stockpile to hedge against delivery difficulties linked to Brexit.

On a positive note, there seems to have been a round of price increases across the sector, the first for some years, though many expect to have to decrease prices as the year goes on.

BPIF economist Kyle Jardine notes: “A number of companies have noted that whilst some clients had been holding back on placing jobs (due to Brexit uncertainty), the floodgates opened slightly as the Brexit timeline was extended and clients were keen to get work ordered and invoiced before the March financial year-ends.”

The increase in paper prices is also pushing competitor pricing for the lead concern, well ahead of the other perennial of labour shortages.

There is no mention of the shortage of paper which could become a concern later in the year as a new round of capacity reductions gets under way.

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The seasonal dip in the new year was not as bad as many had expected, but there is no polarisation between companies that experienced growth and those that recorded a fall in volumes.

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