Still Contracting

By Andrew Paparozzi
In April 8, 2009

In our most recent posts, we’ve been discussing the appearance of some hopeful signs that the economy is starting to stabilize. Nonetheless, as the latest labor market data vividly highlight, the recession is still very much with us. The economy shed another 663,000 nonfarm payroll jobs in March, bringing the decline during the past six months to more than 3.7 million and 5.1 million since the recession began in December 2007. The unemployment rate jumped to 8.5% in March, the highest since November 1983.

Job losses were widespread among industry sectors, with only health care, social assistance, and the Federal government adding jobs. Print and related support activities shed close to 8,000 positions in March, bringing the drop during the past 12 months to 65,800 or close to 11.0%. This compares to a 3.6% decline for the economy as a whole and a 9.9% job loss for the manufacturing sector.

Data from the Bureau of Economic Analysis (BEA) show that pre-tax corporate profits from current production (profits with inventory valuation and capital consumption adjustments) in the final quarter of 2008 were down almost 22% from a year ago, and without the adjustments the decline approached 37%. The environment for profits remained quite challenging in the first quarter of 2009 as well. Although headlines have focused on large financial institutions and autos, the drop in profits has been widespread among industry sectors. With such deep erosion to the bottom line, is it any wonder that companies continue to slash employment as activity shrinks and the need to reign in costs intensifies? Print is definitely no exception. Almost three-quarters of the NAPL Printing Business Panel (a record level) reported in March that profitability was decreasing. But let’s remember, there’s more to improving performance than cutting employment and costs. For some guidance in this area, visit the Metric Tips section of NAPL’s Performance Indicators site .

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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