Establishment Counts: What Do They Mean?

By Andrew Paparozzi
In November 4, 2009

As our previous post, Proof of Structural Change—Establishment Counts, showed, structural change can be seen in all aspects of the commercial printing industry, essentially redefining what it means to be a printer and what it will mean in the future.

A clear reflection of these structural changes can be found in the continuous decline of U.S. commercial printing establishments since the late 1990s—a decline that spans all company sizes and regions. While the decline has recently been exacerbated by the deep recession, do not look for a pronounced turnaround once recovery takes hold: Too many companies simply are not prepared for the ongoing structural change that is redefining our industry. (For a detailed discussion of structural change, see the soon-to-be-published NAPL State of the Industry Report, Eighth Edition.)

What does the drop in the number of establishments mean? As emphasized last time, it certainly doesn’t mean what it once did: less competition. Rather, it means absolutely no company can afford to get complacent as recovery takes hold or become satisfied with the pickup in activity that is likely to develop over the next 12 months. Instead, companies must continuously improve by getting more productive and more competitive—striving to bring greater value to clients. As our State of the Industry Reportemphasizes, “Recovery no longer widens our margin for error. We now have to be as vigilant in controlling costs, maximizing productivity and efficiency, and minimizing waste, spoilage, and rework during upturns as we are during downturns.”

Establishment comp ProductivityThe chart above shows the cumulative percent change in commercial printing establishments and in sales per production employee since 1998. The dramatic consolidation of commercial printing establishments over the past decade is clear—but so is the even greater increase in sales per production employee for the remaining establishments. Greater productivity can’t guarantee success in our increasingly competitive, complex industry. But it’s an important start. How has your sales per production employee been trending? 

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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