Does Anyone Have Any Good News?

By Andrew Paparozzi
In February 26, 2009

President Obama did strike a more optimistic tone in his address to a joint session of Congress. But that
was tone, what about details. There weren’t many, however, here’s what we do know. As if the severe contraction wasn’t enough to deal with, major policy shifts are coming—there’s little doubt about that. From health care to carbon emissions to taxes, the landscape is going to be shifting. Whether you agree
with these shifts or not, you have to incorporate their potential implications for both your company and your clients into your business and strategic planning. Although these policy changes haven’t been fully formulated yet, it’s not too earlier to begin gathering information and thinking about them.

As for the economy, the consensus from Blue Chip Economic Indicators continues to slide, with the
February reading showing a decline of 1.9% in inflation-adjusted GDP for 2009—this would represent the worst performance since a similar decline in 1982. And judging by recent developments, the consensus will likely be revised lower over the next several months. But don’t we have the rebound to look forward to? In the two years after the decline in 1982, GDP rebounded by 4.3% and 7.2%, respectively. However, for various reasons, that’s not going to happen this time around. The Blue Chip consensus has GDP rising 2.1% in 2010—better but still a sub-par performance. As discussed in the latest NAPL Printing Business Conditions, worsening economic conditions are clearly evident in commercial printing industry sales. NAPL estimates these declined 3.9% in 2008, and were down 9.3% for the last quarter of 2008—the steepest for any three months in the over 20 years NAPL has been tracking the industry. We can expect another sharp decline of 3.5% to 4.5% this year, and along with the economy, the initial stages of any improvement are likely to be muted.

What about the good news? It’s certainly difficult to find and it may be more on a company-by-company basis,
but there’s some out there. For what it’s worth, the latest CPI (+0.2%) and PPI (+0.4%) data on core prices—excluding food and energy—suggest that the
deflationary spiral some feared seems unlikely. While not something to do cartwheels about, it just may be something to breathe a sigh of relief over. We have to start somewhere.

Andrew Paparozzi               Joseph Vincenzino                  Kong Lue
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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