The printing industry recorded a marginal growth in the final quarter of 2022, better than the UK economy as a whole which avoided a recession with a 0.1% GDP growth figure.
The BPIF’s Printing Outlook survey is neither as scientific nor as extensive as the government’s report, but is well established and trusted. The marginally positive result was inline with expectations. Those participating in the survey expect the first three months of this year to continue to show minor gains. Some in the final three months had reported a shrinkage in sales and their business contracted as a consequence.
Around 29% of participants reported declines, a figure more than balanced by the 33% who say there were able to increase output and the 38% declaring output remained steady. The expectation for the current quarter is slightly better in output volume terms. Continued uncertainty about future support to mitigate energy costs hang like a pall over the industry while there is hope that inflation at least has peaked.
Prices were increased, but on the whole not as much as the rise in cost of materials and while price inflation is expected to ease in the first months of 2023, there is little hope of matching cost increases with price rises. Paper, board or other substrates account for 36% of total costs.
Business confidence, however, has dipped into negative territory for the first time in two years according to the BPIF. This is the result of continuing uncertainty over the direction of the economy and government policy. In turn this is affecting plans to invest in plant and equipment, now more likely to be be put on hold. Conversely, investment in people, in sustainability and energy initiatives are being supported.
Projects to cut the cost of energy are attracting most investment, followed by investment in workflow and automation and then Net Zero initiatives. Equally alarming is the one in eight have no investments planned for the year.
Many are finding it hard to recruit staff and 34% say have paid a wage increase averaging 5.2% in the final quarter of the year.
The difficulties in recruiting labour have focused investment thinking on automation and further workflow efficiencies while according to BPIF economist Kyle Jardine the elevated energy costs “have made Net Zero and energy efficiencies a much more popular target”.
