Doing More with Less – Just Part of the Answer

By Andrew Paparozzi
In September 14, 2012

Our industry’s recovery continues to be painfully hesitant—on again, off again. We aren’t sliding back into recession, but we’re not gaining any traction either. Total commercial printing industry sales (all sources not just ink on paper) rose by 0.5% in the second quarter after falling 0.8% during the first quarter of 2012. This continues a pattern we’ve witnessed over the past two years of either a small decline or a small increase. Upturns in activity have been short-lived, with modest gains being followed by offsetting loses. At an estimated annual rate of $77.5 billion, sales in the second quarter were little changed from two years ago.

When it comes to breaking out of this pattern, don’t expect much help from the economy. The latest (September 2012) consensus from Blue Chip Economic Indicators has inflation-adjusted GDP rising only 2.1% in 2013, after rising 2.2% this year. Thus, the consensus outlook for next year has slipped below 2012 and highlights that there are no signs the headwinds currently restraining growth—uncertainty, lack of confidence among consumers and business alike, added difficulties obtaining credit, and lower demand overseas—are dissipating.

As discussed in the NAPL State of the Industry Report, Tenth Edition (www.napl.org), stagnant sales, and a subpar economy are not our only problems—companies also are facing rising costs in markets still resistant to price increases. The result: significant pressure on margins and restraint on profitability. In this environment, it is not surprising that more than three-fifths (64.5%) of companies we survey are striving to streamline workflow/processes by reducing touches and steps. Among what companies are doing to make 2012 better than last year, these initiatives were second overall, only behind new approaches to marketing. The aim of these initiatives: to become faster, to do more with less—to boost productivity. But in the current business climate, boosting productivity, while vital, may only provide a partial solution. We must also place some of our attention on growth. How are we going to boost sales? How are we going to create our own recovery? We’ll be discussing what companies are doing to pursue growth in future posts.

Andy Paparozzi                      Joe Vincenzino

 

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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