Downward Revisions Continue

By Andrew Paparozzi
In April 22, 2008

Economic forecasts continue to be revised downward. Will this trend be reversed anytime soon? Given factors like the recent spike in oil prices, the hardly mentioned surge in natural gas prices, and continuing dismal housing statistics that’s not very likely.

The April consensus forecast from Blue Chip Economic Indicators has gross domestic product (GDP) adjusted for inflation rising 1.4% in 2008, just slightly below the March consensus of 1.5%. However, the consensus was less than half that of a year ago. The 2009 outlook also was shaved by 0.1% to 2.2%. While the forecast is for some bounce back in the second half of 2008, GDP growth is expected to remain sub-par well in to 2009. Furthermore, mounting costs pressures and the ongoing credit crunch continue to put risks to the outlook on the downside. Don’t be surprised by further downward revisions in coming months.

Lowered expectations also have been common among printers. Given the importance of the economy to the print industry, that’s to be expected. Almost half (45.7%) of participants to the NAPL Critical Issues Survey revised their 2008 expectations down, while 26.1% had revised expectations up. These data are from late February and early March. We could easily see the gap widen when the data are more fully tabulated. However, note that responses are not in one direction. While a rising tide no longer lifts all boats in our industry, neither are they all grounded by an ebb tide. What are you doing to stay afloat and catch the tide coming in?

Joseph 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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