Industry Recovery: On Again, Off Again
Government data are being spun this way and that depending on which side of the political isle one’s standing. That latest labor market data from the Bureau of Labor Statistics (BLS) provide a good case in point. One side is focusing on the less-than–stellar gain in nonfarm payroll jobs (114,000), the other on the sizable drop in the unemployment rate to 7.8%. Businesses base decisions on government data, and with this in mind, it is important to remember that government data are estimates based on surveys and statistical models. At times they can be subject to anomalies and are frequently revised—sometimes revised significantly. Thus, we need to keep the monthly swings in the data in perspective; we need to remain focused on the big picture. Unfortunately, this hasn’t changed much. There still are no signs that the headwinds restraining growth—uncertainty, lack of confidence, added difficulties obtaining credit, and lower demand overseas—are dissipating. 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. If you’re waiting for a better economy to solve some of your challenges, you may find yourself running out of time.
Our industry’s recovery continues painfully hesitant—on again, off again. We aren’t sliding back into recession, but we’re not gaining any traction either. NAPL estimates that total commercial printing industry sales (all sources not just ink on paper) rose 0.5% in the second quarter, but fell 0.1% during the first half of 2012. This continues the 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 $77.5 billion, sales are little changed from two years ago, when the printing industry’s steep downturn bottomed.
While industry sales have shown essentially little net movement, the same is not true among individual companies. Almost half (49.0%) of the NAPL Printing Business Panel showed an increase in the second quarter of 2012, and for more than one-third (34.5%) the increase was more than 5.0% and for more than one in 10 companies (11.7%) the increase was more than 20.0%. At the other end of the spectrum, sales for 6.9% of Panel members declined 20.0% or more. Why are some companies succeeding, while others are not? As we discussed in the recently published NAPL State of the Industry Report: Tenth Edition, and will continue to discuss in future posts, much of the difference can be linked to individual company initiatives and execution.
Andy Paparozzi Joe Vincenzino