Commercial Printing Industry 2010: Recovery, Not Expansion

By Andrew Paparozzi
In April 30, 2010

Recovery and expansion. The two terms are not interchangeable. 

Recovery means the contraction has stopped. Recovery has already begun for the American economy and is getting closer for our industry, as these the preliminary data show: 

• Sales up 1.3% in March for the NAPL Printing Business Panel, potentially the first increase in 19 months and only the second in 22. 

• Sales above year-earlier levels for 58.3% of the Panel and down for 41.7%. The comparable numbers for March 2009: Sales up for just 28.3% and down for 71.7%. 

(Final data, along with a first look at one of the recovery’s big challenges—resurgent cost inflation—will be included in the complimentary NAPL Webinar “The New Rules of Recovery,” May 14. Click here to register.) 

Expansion,in contrast, means we have regained our pre-recession sales volume. As discussed in the NAPL State of the Industry: Strategic Perspective 2010 and illustrated below, even under the extremely optimistic assumptions that our industry grows 2.0% this year and then 5.0% per year beginning next year, we don’t regain our pre-recession sales volume until sometime in 2014. 

Is it possible we never do? The ink-on-paper component of revenues certainly isn’t likely to. That’s been clear for years. (See “New Revenues for a New Industry.”) But we aren’t about just ink-on-paper anymore. And we haven’t been for a long time. We are creating revenue from services we would not have envisioned a decade ago. And a decade from now we will be creating revenues from services we cannot envision today as we get deeper into the business of helping our clients communicate more effectively with their clients. 

As NAPL has long emphasized, the size of a market is important. How fast a market is growing is important. But how share is being
redistributed within the market is most important. In our industry market share is being redistributed from companies that print to companies that put print to work for their clients. It’s not about growing with the market anymore—not even hot markets like variable-content digital, database management, 1-to-1
marketing, and Web-to-print. It’s about getting on the right side of the redistribution by getting more productive, more competitive, and more valuable to clients. How are we doing that? That’s the question every company in our industry should be asking.


Picture 1

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.

4 Comments

  1. During this economic crisis, it is good to see that some industries are getting back to normal. Its not expansion, but it could be worse. Other industries like the automotive and housing industry are struggling for dear life. Hopefully this news is a sign that our economy is getting back to normal.

  2. Hi Arian,
    Thanks for posting your comment. I think you are right. It definitely could have been much worst, but that is behind us. What we need to think about now is how are we going to best take advantage of the recovery and hopefully the expansion that will follow it. Please check back for future posts and continue to give us your comments on them.
    Sincerely,
    Kong

  3. I would like to express my appreciation for your post Recovery and Expansion. That’s really great to know that there are such people like you who do their job very well and with such enthusiasm.

  4. Thank you so much for the kind words. Please look forward to other posts about the recovery.
    Sincerely,
    Kong

Leave A Comment