Free Fall is Over
"Conditions in the industry have improved, but only relative to the deeply depressed levels of spring 2009," said economists at the National Association for Printing Leadership (NAPL) in the NAPL Printing Business Conditions update released last week.
"Sales are still down, but trends over the last three and six months show that the industry is headed in the right direction," they continue, pointing out, however, that "as the economy heats up so will cost inflation, and it is difficult to pass through higher costs to customers in markets that are still very weak and intensely competitive."
According to the report, sales fell 8.7 percent during the six months ending in March and 5.4 percent during the three months ending in March, a marked improvement over comparable numbers a year ago, when sales were down 12.1 percent over the previous six months and 14.3 percent over the previous three months.
"While the six-month average captures trend, the three-month average-which was down 18.1 percent at the deepest point in the recession-anticipates the direction of a trend," say the NAPL economists. "As we approach mid-year, the free fall is over and we are moving toward growth."
Part of the NAPL State of the Industry Series sponsored by Heidelberg, the report noted that 40.8 percent of NAPL Printing Business Panel members said sales increased last quarter-nearly five times the 8.6 percent that reported rising sales in the first quarter of 2009. And, while 59.2 percent still report sales decreasing, that is down significantly from the 91.4 percent who reported sales were down at this time last year.
These positive signs are tempered somewhat by rising paper, ink, toner, and energy costs. Nearly two-thirds (65.7 percent) of the Panel members report paper prices have risen an average 5 percent this year, and 43.3 percent say that energy costs have increased an average 6.7 percent.