For an industry plagued by predictions of doom and gloom, it certainly offers tremendous opportunities for growth and success to those who can remain flexible and adaptable. Sales figures for the top 100 manufacturers added up to a whopping $2.97 billion for the last fiscal year completed. And, while this is only a slight increase from the previous year’s grand total of $2.92 billion, it was achieved despite sharply increasing costs for raw materials, postage and fuel. Marketplace demand for printed products, it seems, is on the rise—a trend documented in several key industry studies.
Dr. Joe Webb, director of Lexington, Kentucky-based WhatTheyThink’s Economics and Research Center, reported printing industry profits for the last four quarters, Q3-2006 to Q2-2007, were $5.15 billion on an inflation-adjusted basis, compared to the same period a year ago, when profits were only $3.86 billion—a 23.4 percent increase.
In addition, a recent annual survey of leading American creative professionals conducted by New York-based Graphic Design USA (GDUSA) and sponsored by MAN Roland, Westmont, Ill., revealed the percentage of designers working in print is increasing. Gordon Kaye, GDUSA publisher, said respondents view print as more “trustworthy and credible” than other media, and believe its very “tangibility and permanence” connote a sense of authenticity.
And, according to the just-completed 2007 Ratios Survey conducted by PIA/GATF, headquartered in Pittsburgh, printing industry profits increased slightly over the past year, reflecting the rates of the mid- to late-1990s. The average pre-tax profit on sales was 3.4 percent for the typical Ratios participant this past year—which is within the 3.0 percent to 3.4 percent range experienced from 1995 to 2001—compared to 2.7 percent for 2006.
Obviously, factors to bear in mind when interpreting the sales figure are the ongoing consolidations skewing the landscape from year to year, and respondents reporting idiosyncrasies. Nevertheless, in the final analysis, print still makes the business world go round, despite inroads by electronic media.
So, how did the major product groups actually fare this year? The following figures show the top 100 manufacturers’ combined sales for each category, and the percentage of the $2.97 billion annual sales total they represent:
Sales $(000) %
• Forms $931 34.5
• Labels & Tags $507 18.8
• Commercial Print $190 7.1
• Direct Mail $104 3.8
• Promotional Products $94 3.5
• Plastic Products $93 3.5
• Digital Print $26 1.0
• Bar Codes $8 0.3
The top manufacturers also reported $701 million in “Other” product sales, accounting for 26 percent of the total sales. Envelopes were the most common response for this category, but it also included toner, decals, custom-designed vinyl holders and pouches, custom stationery, jumbo rolls, presentation packaging, checks, cut sheets, POS rolls, document and finishing supplies and digital books.
Once again, forms prevailed. Although down from last year’s $1.08 billion, they still dominated the field, while labels and tags were up from $477 million. Commercial print sales last year averaged $239 million, and direct mail generated $119 million. Although this year’s data represented a dip in comparison, industry experts consider both products major growth areas.
Manufacturers and distributors are also excited about opportunities being driven by sustainability initiatives, and next year’s listing is sure to reflect their efforts.
Similar to every other industry today, printed business products are weathering the storms of uncertain economics and evolving markets, as well as rising payroll expenses and exorbitant insurance premiums. Still, the top performers comprising the list are testaments to the fact that when the going gets tough, the tough get going. In the words of baseball great Tug McGraw, ya gotta believe. Play ball!
Related story: Top 100 Manufacturers Chart