The rollercoaster ride for UK print continues according to the BPIF’s quarterly Printing Outlook survey.
In Q1 high costs, higher pries and lower orders meant that the industry experienced “significantly more challenging” conditions than had been expected in Q4 when optimism prevailed. It meant that while one in three printers noted a growth in output and 29% held output steady, 38% found that output had fallen.
At the same time confidence levels were down in Q1, the first quarter to experience a fall in confidence after a run of seven positive quarters. However, the industry is optimistic for the three months between April and June. Some are experiencing a fall in costs which is feeing through to greater interest in print. Nevertheless April’s capacity utilisation figures was down on January’s.
For the current three months 43% are predicting growth in volumes, 48% that volumes will remain steady meaning that just 9% expect output will fall. Growth for May and June will pick up after a subdued April, though the run of bank holidays may prove to have a impact.
The lack of orders has fed through into an inability to increase prices to match cost increases, hence margins remain under pressure. Expectations are that these pressures will ease over the course of the year.
The exception is labour costs, which most expect will increase. The labour situation is somewhat confused. Labour costs are one of the top three concerns for businesses according to 50% of those questioned. Access to skilled labour is a key concern for 35% of the cohort while many businesses have reduced headcount during Q1.
Pricing below costs is a key concern for 54% of those quizzed, making it second only to energy costs which are the key concern for 68%. Energy costs can be expected to dip in response to wholesale energy prices, joining the reported decline in substrate prices.
For the first time, the BPIF included a question about sustainability and the actions that companies are taking. BPIF economist Kyle Jardine says: “Sustainability credentials are becoming more important in the printing and printed packaging industry. For the first time the Printing Outlook survey has included a section of questions related to sustainability, the intention is to attempt to understand a bit more about what actions companies are taking towards making sustainability improvements. Almost two-fifths (38%) of respondents have reported that they are measuring their carbon emissions.”
