It might feel tougher than ever to make a good living in the industry, but the statistics show that the reality is not as bleak. Indeed, the UK printing industry has continued to grow revenues, though the growth is set against the continuing struggles the industry faces in high volume markets.
Declines, according to the official UK Government Prodcom statistics, continue in newspapers, magazines, catalogues and advertising material. All are tilted towards higher volumes, suggesting that buyers are cutting print runs or reducing the numbers of sections in catalogues and magazine. This is underscored by paper consumption which continues to fall in the main printing grades.
Across Europe this had led to the closure or conversion of paper machines producing SC and other gravure and lower quality web offset papers. Paper producers are directing capacity to corrugated and other packaging papers. Higher value papers, led by uncoated, are faring relatively well.
The pressure on high volume, low value print has led to the loss of capacity: Southernprint’s closure at the end of the year is part of this correction, likewise the collapse of Howard Hunt which caused barely a ripple. This is without the numerous other closures across the UK and of print across Europe, led by the collapse of the Circle Media Group last year.
Almost unnoticed, printers have been cutting capacity, one press replacing two or three machines, and with the reduction in overheads that is part of this. Other companies have remained in business, but removing litho capacity and relying instead on trade printers and retaining digital for short run fast response print, believing this to be cheaper.
The government figures bear out these trends. In sectors where short runs, even personalised print, predominate, sales are on the increase. Thus the demand for greetings cards is unchanged from 2008 and has been increasing in recent years. Likewise, photo products continue to grow rapidly while stationery is only in slow decline over the decade. Meanwhile revenue from printing books continues to underline the resilence of the printed word.
The Prodcom figures for 2018 have just been released. These show that printing, other than newspapers, is a £10 billion industry and growing, albeit slightly. The full figure for 2018 is £10.079 billion compared to £9.974 billion in 2017 and £9.964 billion in 2016. This is still well below the equivalent figure in 2008 when commercial printing generated revenues of £12.468 billion. However, this is not a direct comparison because the government has started to include the value of printing textiles and industrial printing in the total. These are sectors that have only been included on the last three occasions. Both are growing sectors.
Textiles amounted to £128.9 million in 2018, a growth of more than 25% in three years. While industrial printing, reckoned as printing on ceramics, electronics and for other functional rather than decorative purposes on non fibre substrates, is not growing as rapidly, it is a larger sector. In 2018, industrial printing accounted for revenues of £1.428 billion up from £1.336 billion two years previously.
Wallpaper is not considered an industrial print segment, but a sector if its own. Perhaps due to changing fashions, UK sales are in slow decline, reducing from £123.9 million in 2008 to £102.0 million in 2018. Most wallpaper producers have invested in digital production of some kind to offer shorter runs of higher value products to compensate for declines in volumes.
In contrast some printed products have shrunk to the point where it is no longer possible to account for them accurately. Colouring books and dictionaries and reference books fall into this category, while demand for printed reports and accounts is shrinking fast.
The books sector continues to be a bright light for UK print. Publishers have embraced the cost savings that are possible through supply chain management and print on demand to match orders rather than ordering at the lowest unit cost and storing books in vast warehouses with the inherent risks of over ordering, waste and so on.
This does not mean that it is all good news for book production. Latimer Trend closed during the year provoking widespread speculation as to the underlying reasons. Elsewhere there has been investment, almost all in digital printing.
Thus Ashford Colour Press, Clays, Severnprint, Charlesworth and Halstan Press have all increased their ability to cope with short runs in the year. Book publishers are also accepting digital printing for colour books, at least for some types of book, as inkjet printing in particular demonstrates it can deliver the necessary consistency.
It has not all been about digital printing. Bell & Bain, which ran the rule over Latimer Trend, has ordered large format Koenig & Bauer litho presses for installation this year, confident that it can meet the demand for faster turnarounds that can compensate for the lower unit costs of printing in the Far East, and with a reduced carbon footprint and CSR risk.
Books had been a growth area in 2008 when the value of book printing had been £581.9 million. By 2016 revenue had reached £1.035 billion, breaking the £1 billion barrier. By 2018, sales reached £1.146 billion.
There is no doubt also that demand for books has been helped by the greater access to books through online sales, through self publishing, and through micro publishing start ups creating a handful of books a year. It has also been helped by widespread investment in perfect binding and case binding for short run book production and thus, increasing the ability to bring new types of book to market which have shorter runs than would previously have been commercially feasible for back list titles.
This is a shift that can and will be repeated in other sectors. Where the creation of the job has been constrained by expertise and the need to drive down unit costs, the move now is towards shorter runs for start up and micro businesses exploiting the possibilities of digital printing and automated finishing processes. The coming year will see this happening in packaging, travel, direct marketing and other sectors.
In the last year, the biggest UK sales went to Pinch of Nom, a book on healthy eating written by two food bloggers. This achieved sales of 1,047,672, according to Nielsen Bookscan.
This is indicative of the changing nature of publishing. A social media following or presence can spawn a book title which can be snapped up by followers of the blog, Pinterest or Instagram account. Pinch of Nom itself spawned the Pinch of Nom Food Planner, notching sales of 137,924 in six months. Another title in the franchise was published at the end of the year and will surely feature in the next bestsellers list. Housework was perhaps a surprise inclusion: Hinch Yourself Happy was at the fifth top seller of the year with 427,060 copies sold and Mrs Hinch: The Activity Journal selling 218,471 despite publication in October.
The rise of non celebratory food and health books is an established phenomenon, followed by real life behind the scenes memoirs from professionals in stressful jobs in law, medicine and even football. These outsold the major celebratory autobiographies from Elton John (165,291 sales) and Billy Connolly (146,909 sold).
Perennial big sellers, JK Rowling, Philip Pullman and EL James, are present, though the most successful children’s author of 2019 was comedian David Walliams. He has four books in the top 50, including those at numbers three and four.
Publishing, it seems, is in rude health. In the longer term the ebook may stage a come back, some pundits predicting that like music and films, subscription based streaming offers a new model for book publishers in coming years. Audio books are currently the fastest growing format.
Healthy demand for printed books may also be responsible, at least in part of the relatively good performance of trade finishing services. Despite the trend to bring short run work at least, in house, revenue achieved by trade finishers ended 2018 up on the previous year at £230.3 million (£200.0 million), though still down on the 2008 revenue of £263.8 million. The intervening years have seen steady investment by printers in lamination, binding, and value added finishing that would otherwise have been out to the trade.
In contrast to books, magazines and journals are in decline. The sector was worth £934.5 million in 2008, falling to £423.2 million in 2016 and further to £377.3 million in 2018. The largest distribution titles have suffered most: free magazine publisher Stylist closed Shortlist, taking 502,000 weekly magazines off the streets. Other notable closures included Asos magazine, one of the first to demonstrate that print helps an internet presence. The online clothing store is to focus efforts instead on social media.
TI Media reports a continuing decline in magazine circulations led by its women’s titles. It has closed NME, Marie Claire and Now in the last couple of years. Fashion magazines are clearly under pressure, particularly those that are not clear leaders in their sector.
Rival publisher Future has taken advantage of this to agree a £140 million takeover for the publisher in October. This pushed the fast growing publisher’s shares higher, which was corrected with a 10% fall when some of the management team sold shares at the end of November. The deal is expected to complete in the spring.
The transition has already played out in business to business publishing where once lucrative recruitment advertising has shifted online. But major publishers are continuing to shift to digital ways to make money, focusing on data and events rather than print on paper.
A stand out is Mark Allen Group, publisher of the likes of Printweek and now Farmers Weekly among its 100 business titles. It has reported an 18% rise in revenues for 2019, having acquired 12 titles earlier in the year.
However, it is managing costs, typified by the reduction in the frequency of Printweek to monthly publication during the year.
Specialist interest publications remain more resilient with a flush of titles with high production values and equally high cover prices appearing on news stands and appealing to a younger digital savvy audience from micro publishers.
Then there are plenty of magazines to match leisure interests from gardening to model railways, history and so on.
Investments in the year include a MAN Lithoman at the beginning of the year for Acorn Web Offset and a similar press arriving at Warners at the end of the year. Stephens & George has ordered a latest long perfect XL106 while new capacity has helped Mansons, Premier Print, Micropress and others cope with demand for shorter runs and to reduce waste.
As yet, digital has not made any real impact on magazine printing. However, as print runs for business to business and specialist publications continue to fall below the barrier for litho to be viable, continuous feed inkjet will become interesting.
Catalogues have fallen hand in hand with the decline in magazines. A sector worth £559.1 million to printers in 2008, generated revenue of £170.0 million in the 2018 Prodcom statistics. This business has been lost to the internet, moving from sales on the page to sales on screen. The disappearance of gravure capacity around Europe demonstrates that this is not just a UK phenomenon but one that is affecting all mature economies, though the UK has embraced online shopping with greater gusto than any other country.
Where online printers are using print, it is to drive visitors to their websites to make or complete a purchase. The catalogue no longer needs to be comprehensive with all the waste entailed in presenting the maximum number of products to prospects who are interested in only a small proportion of what they might advertise. Instead the hero products and bargains will be enough to attract attention and drive traffic where stored profiles take over.
The threat remains that even print used in this way can be lost to social media, text or email. To counter this, the potential exists for retailers to use digital print technology in combination with databases and customer profiles to present an array of products that can be different for each customer.
FirstMove did precisely this with a first venture into print for an online retailer specialising in selling products for the late in life generation. To what extent it will be inspirational for others remains to be seen, but it will need to demonstrate a proven ROI and that the production of the catalogue is simple and accurate.
Few currently have the depth of data to make this feasible though development of artificial intelligence programs could solve this problem. High quality, high productivity digital colour printing is also essential and that is not yet widely available.
Those defending the printed catalogue may be better placed in promoting the use of print to link to a website using some kind of scannable watermark or AR technology. In the UK to date this has had limited success, though a high profile successful project will change the whole approach to providing print with interactivity.
Elsewhere JICMail advocates for the use of printed catalogues and other forms of direct mail, producing figures to prove that a catalogue stays in use for many weeks in most households.
This has, however, not stemmed the migration away from print and it is difficult to see a change in the immediate future. Ikea remains a strong supporter of print, though not of UK print.
The greatest opportunities will come from catalogues presented as ‘source books’, not presenting a simple image and related description, but showing products how they might be used in ideal settings, using print to inspire in publications that combine high quality design, paper and print that have a longer shelf life.
These suit high value products targeted at a limited audience that is more likely to respond to a carefully created message than carpet bombing with lowest cost of production print.
Direct mail requires envelopes with sales down around a third in the ten year period. In 2008, UK sales stood at £231.8 million. Ten years later envelopes generated sales of £169.5 million, almost the same for the previous two years.
Direct mail itself falls into the print for advertising category in the government statistics. This is another sector that has shrunk sharply over the decade. In 2008 advertising, including direct mail and point of sale as well as general collateral, achieved sales of £2.040 billion for printers.
By 2016 this had become £1.452 billion and by 2018, dropped again to £1.354 billion after a slight increase to £1.537 billion in 2017.
This accords with the even faster growth of revenue for online and digital advertising channels in the same period. The drop back in 2018 after a small recovery in 2017 can be attributed to the arrival of GDPR resulting in a pause in direct mail activity which immediately followed the vesting day.
Point of sale may be showing signs of the depressed high street activity with the closure of retail chains, affecting both upper end off the peg clothing and mid sector eating chains.
This has continued into 2019, so is unlikely to show a recovery when the government compiles, checks and publishes the figures from last year. The drought of work across the sector almost certainly accounts for the demise of many print companies, the largest last year being Howard Hunt.
Stationery counts as functional print rather than promotional, and thus discretionary, print. It has fallen in value since 2008 but in a rather more shallow curve, from £1.155 billion to £1.139 billion in 2016 and £1.064 billion in 2018. People, it seems, continue to buy compliment slips, business cards, and so on even though there is a shift to plain paper invoicing using desktop laser printers rather than overprinting a preprinted three-part form. The low cost options of online print may have helped keep print attractive through promoting the ease of ordering print and keeping prices low. The same online print trend may also be responsible for exporting some of this work from the UK to printers in Europe.
Not all sectors are in stately decline. The printing of greetings cards is worth a fraction more in 2018 than in 2008. Ten years ago it attracted sales of £79.574 million and in 2018 this was £79.578 million, an increase over the previous year.
The most dramatic increase has been in pictures and photos where a market worth £19.026 million in 2008 has become a market valued at £75.401 million in 2018. Online printing, the gazillions of pictures taken by mobile phones, and the gradual appreciation that print is a more robust medium, one that has greater emotional impact for storing memories than digital, whether on CD, hard drive or the cloud has stimulated new products through digital printing, photo albums, wedding albums, calendars, and a myriad of other personalised products that were simply impractical to print previously.
The newspaper sector had already been hit badly before 2008 when printing of dailies brought in revenue of £445.8 million. This had fallen to £102.9 million by 2016, but has recovered since then to £365.4 million in 2018. Increasing cover prices to cover newsprint and perhaps a post referendum stimulation of interest in politics seems to be responsible for the improvement. Production of weekly newspapers in contrast continues in freefall. Revenue of £1.248 million in 2008 has become £486.6 million. If commercial printings has been in slow decline, faster in some areas than others, packaging has been more than holding its own. There has been growth in most sectors of fibre based packaging.
Corrugated has shown more expansion, driven by demand from online retailers and by changing supermarket habits. Thus sales of £2.014 billion in 2008 had become £2.493 billion by 2016 and £2.879 billion in 2018. In the same period the sales of folding cartons increased to £1.054 billion having started a decade earlier at £875 million.
Labels have shown a divergence. Self adhesive labels have increased while sales of wet labels have declined and now represent less than 10% of the overall label market by sales. In the ten years self adhesive labels have increased sales by almost 50% rising from £501 million to £773.5 million in 2018. This was down on 2017’s total of £824.3 million.
Wet label sales also peaked in 2017 at £57.2 million, dropping back to £42.1 million a year later.
Sales of photobooks and other photo products have grown sharply. The market, which was valued at £19.0 million in 2008, was worth £75.4 million in 2018.
Story 1 of 5
Despite having only been recorded for the last three years, textile printing is growing strongly. Amounting to £128.9 million in the UK in 2018, it has seen a growth of over 25%. Suppliers are helping with simpler more cost effective or productive digital solutions.
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Greater access to books through online sales, self publishing and micro publishing start ups, as well as widespread investment in perfect binding and case binding have all supported increased demands for books, resulting in UK book printing being worth over £1 billion in 2018. This is nearly double the £581.9 million recorded in 2008.
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Most sectors of fibre based packaging has seen growth, with corrugated increasing sales from £2.014 billion in 2008 to £2.879 billion in 2018. This is down to increased demand from online retailers and changing supermarket habits.
Story 4 of 5
Daily newspapers had fallen from £445.8 million in 2008 to £102.9 million in 2016, but had largely recovered with revenue of £365.4 million. It is likely that a post referendum interest in politics aided increased cover prices in improving revenue. Production of weekly newspapers continues in freefall. Revenue of £1.248 million in 2008 has become £486.6 million in 2018.
Story 5 of 5