Is It Really Over?

By Andrew Paparozzi
In November 11, 2009

That’s the question many are asking about the economic recession. While there won’t be an official pronouncement from the National Bureau of Economic Research (NBER) for some time, the latest data on gross domestic product (GDP) suggest that it is. As reported by the Bureau of Economic Analysis (BEA), GDP rose at an annual rate of 3.5% in the third quarter—the first increase in a year and the strongest in two. Is the recession over? If we’re just looking at whether overall economic activity is rising or falling, the recession is probably over.

However, saying the recession is over doesn’t say very much about the state of the economy and business conditions other than—the worst is behind us. As NAPL has long emphasized, the end of recession does not mean the beginning of good times—economic recovery can be vigorous, feeble, or anything in-between. And given the depth and complexity of the excesses that created the recession, this recovery is likely to be painfully slow at first, not feeling much like recovery until well into 2010. That’s not much solace to the 15.7 million unemployed and almost 10.1 million underemployed or discouraged individuals—representing almost 16.7% of the labor force. And it’s not much solace to the many businesses, especially small businesses, which are struggling in the current environment. The worst may be over, but for many any meaningful improvement is a long way off and for some businesses it may come too late.

Indications are that the worst is also over in the sharp downturn experienced by print—a downturn that actually began in the second half of 2007. As noted in the recently released NAPL Printing Business Conditions: November 2009, the NAPL Printing Business Index™ (PBI) stood at 34.3 in October—a far cry from its recent peak of 59.8 in September 2007 but up from its all-time low of 21.1 in March 2009. Furthermore, the PBI has now risen for three consecutive months. (A reading above 50.0 means more of the companies we survey report activity is picking up than report activity is slowing down; a reading below 50 means the opposite.)

So the economic recession appears over, as does the downturn in our industry—now what? Regardless of ensuing strength in the economy or lack there of, companies need to ask and act upon these questions: 
    • What are we doing better today than we did two years ago?
    • What will we be doing better in two years than we are today?
    • How are getting more valuable to our clients?
The industry is not returning to its pre-recession form. Structural changes have and will continue to see to that. During challenging and uncertain times taking a wait-and-see approach may be tempting, but should be vigorously avoided. Recovery complacency, or complacency at any time for that matter, is a luxury companies in our industry can ill afford.

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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