No Rush to Hire
Financial markets reacted positively to the latest employment data from the Bureau of Labor of Labor Statistics (BLS)—April nonfarm payrolls up 165,000 and the unemployment rate nudging lower to 7.5%. Part of the favorable reaction also reflected upward revisions to earlier months. The upbeat mood on Wall Street isn’t surprising, as these data clearly beat expectations. However, beating expectations doesn’t necessarily tell us about the current state of business conditions and economic activity. At least, that’s the case for the commercial printing industry, where conditions are still being characterized by inconsistency and uncertainty. An NAPL State of the Industry participant described business conditions simply as “uneven—feast/famine.”
Besides sales, inconsistency and uncertainty also are being reflected in the industry’s overall staffing. According to BLS data, total employment for print and related support activities during the first four months of 2013 fell 2.0% from year-earlier levels. The decline for all of 2012 was 2.1%. The drop among production and nonsupervisory workers was even steeper—3.4% for all of 2012 and 2.8% for the first four months of this year. (See the chart below.) While the decline, no doubt, reflects ongoing industry consolidation, it also reflects erratic demand.
Furthermore, companies, on net, have not been boosting hours, something you would expect to see if business was firming substantially. Among NAPL State of the Industry participants, more reported lower (35.3%) payroll hours than higher (24.1%). This isn’t surprising since sales were essentially flat in the first quarter, continuing the string of fits and starts we’ve been witnessing for several years now. Two-thirds of State of the Industry participants expect to either leave staffing unchanged (56.4%) or to reduce it (9.8%). And based on the critical needs companies have identified, we can assume that for those that expect staffing to increase (33.7%), much of the increase will be in the areas of sales, marketing and CSRs.
Andy Paparozzi Joe Vincenzino