Print Industry at Large

By Andrew Paparozzi
In June 18, 2009

The recently released 2007 Economic Census from the U.S. Census Bureau provides a wealth of information on the nation’s industries. Data from the release put value added as a percent of total shipments for the commercial printing industry at just over 60% in 2007—about the same as it was in the 2002 Census. Other data from the census suggest that there hasn’t been much movement away from our primary products. These account for 90.7% of total shipments—just slightly less than in 2002. With all the added emphasis on diversification and value added services, why haven’t these ratios changed more? A possible explanation: these data represent the “industry at large.” While many companies are diversifying or attempting to, how many are doing so profitably? We all know the wide variation that exists at the company level.

Data from NAPL’s Performance Indicators program clearly highlight the variation among companies when it comes to value added relative to sales—one of the programs key indicators. For a discussion on the importance of value added, see the Metric Tip dated 04/26/09, “The Value of Value Added.” Recent data from the program show the top 20% of the group with value added/sales averaging 76.5% in 2007 and maintaining a ratio consistently above that since. For the six months ending March 2009, their value added to sales ratio averaged 77.7%. At the other end of the spectrum, the bottom 20% had value added/sales averaging 47.1% in 2007and 49.2% for the six months ended March.

As the economy recovers, we need to remember that not everyone will participate. Recoveries in the industry are becoming more and more exclusive. In these challenging times, improving continuously and striving to be and remain among the industry leaders has never been more important. For an explanation of how NAPL defines who’s a leader and why some past leaders lost their competitive advantage, see NAPL Strategic Perspective 2009. The message from all of this: Be careful how you use industry-wide data. Is it what you really want to compare yourself to?

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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