Commercial Printing Industry Sales Expected to Grow after Midyear

By Andrew Paparozzi
In April 19, 2010

Growth is finally coming back to our industry. Exactly when will depend on the strength of the economy and how soon price stability is restored. But we should be growing again—for the first time in three years—sometime during the second half of 2010.

For now, however, we’re still measuring progress as a reduced rate of decline. Our sales were down around 8.0% during the three months ending in March, according to preliminary NAPL data. In comparison, sales were down 10.2% during the three months ending in January, 14.4% during the three months ending last October, and a record 18.4% during the three months ending last June.

The economy’s growing strength will clearly help us. So will easier year-over-year comparisons—put simply, it isn’t going to take much to beat 2009’s grossly depressed numbers.

But restoring pricing power will be a problem. Prices didn’t stabilize until nearly a year after the end of the 2001-03 recession. And our industry is at least as competitive now as it was back then. Moreover, cost inflation is accelerating. How much of the increase will we be able to pass through as higher prices or offset with productivity gains? The answer will say a lot about how much sales growth turns into profitability growth.

NAPL’s forecast range for full-year 2010: Sales down 2.0% to up 2.0%. In comparison, sales declined a record 14.9% last year and 4.0% in 2008. (See graph below.) The question, as emphasized in the NAPL State of the Industry: Strategic Perspective 2010: Who’s going to participate in the recovery ahead—because not everyone will.

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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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