Are They Working Yet?

By Andrew Paparozzi
In October 14, 2008

The financial landscape continues to change at a stunningly rapid pace. In less than a month, the financial system we became accustomed to is gone. The breakdown of overly leveraged institutions and, in turn, the freezing of the credit markets have put undue stress on the backs of many participants in the economy—be they Wall Street or Main Street. Efforts by the Federal Reserve, the Treasury and their international counterparts have taken on an intense sense of urgency. Their immediate goal is to restore confidence in the financial markets and get credit flowing. Are these measures working yet? Despite the unprecedented nature of measures being proposed and implemented, success will not happen overnight. How well are you prepared to meet the immediate business challenges? Are you polishing your fundamentals regarding cash management, effective cost cutting, prudent capital investment, etc?

What a time for a credit crunch. Sales in the commercial printing industry (from all sources) continue to slide—down 2.3% compared to a year ago for the six months ended August. The drop in activity is clearly reflected in the industry’s employment data. After stabilizing for several years, production employment is down 2.4 % for the January-August period, averaging 331,200. Furthermore, average weekly hours during the period are down almost a full hour to 38.7 hours. No doubt, the drop in employment and weekly hours for commercial printing are reflecting the cyclical downturn. But during all the turmoil, let’s not lose sight of ongoing structural changes in our industry.

As shown in the upcoming NAPL State of the Industry Report, Seventh Edition, consolidation of print industry as been going on for a while, and will continue even after the economy turns around. According to data from County Business Patterns and NAPL estimates, we’ve lost a net total of almost 6,900 commercial printing establishments between 1998 and 2008. Despite consolidation, printers have and will continue to face ever more competition for new and existing customers, competition that is not just coming from other printers. How well are you prepared to meet challenges over the long haul?

Andrew Paparozzi
Joseph Vincenzino
Kong Wang

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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