The following article was originally published by Printing Impressions. To read more of their content, subscribe to their newsletter, Today on PIWorld.
If there’s one variable that historically has influenced the direction of our industry, it’s the economy. As we learned in Print+Promo’s March State of the Industry report from Dr. Ron Davis, senior vice president and chief economist for Printing Industries of America (PIA), Warrendale, Pa., the average post-World War II recoveries have lasted six to seven years, and the U.S. recently finished its seventh year of recovery since the Great Recession hit. When recovery is in a very mature phase, print performs well.
That was the case for 2015, but how would 2016 to 2017 play out? The answer wasn’t so clear. “The most likely scenario is a continuation of slow economic growth and stable print markets—nominal print sales might show no growth or grow at around 1 percent,” Davis told us. “However, there is a significant (30 percent) chance of recession, and that would certainly reduce printing shipments by 2 [percent] to 4 percent.”
Then there’s election season. While most agreed that political printing could give the industry a minor short-term boost, they also admitted that the incoming president’s agenda would have the greatest impact. As Andrew D. Paparozzi, chief economist and senior vice president of Idealliance, Alexandria, Va., pointed out, unlike many previous elections, both candidates differed profoundly in their views of what’s best for the economy.
And with uncertainty, comes fear. “… There is extraordinary uncertainty about where the industry, economy and things, in general, are headed,” Paparozzi shared. “Uncertainty, whether economic or political, tends to dampen economic activity by encouraging companies to delay investment and hiring, and consumers to delay spending until the outlook clears.”
We now know that on Jan. 20, 2017, Donald J. Trump will be sworn in as America’s 45th president. Furthermore, the Senate and the House will both remain in Republican control. This leaves many to wonder what these victories mean for our corner of the business world. Mark Michelson, editor-in-chief of Printing Impressions, a sister brand to Print+Promo, reached out to Michael Makin, president and CEO of PIA, and Mark Nuzzaco, government affairs director at NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, Reston, Va., for answers:
PHILADELPHIA — November 9, 2016 — In what many considered the most divisive election in modern times, American voters have spoken: Donald J. Trump will be sworn in as America's 45th president in January and the Republican Party will maintain majority control of both the U.S. Senate and U.S. House of Representatives. Also of interest is what the election results will likely mean for people who make their livings working in the graphic arts industry.
To gain some perspective both from what it means for printing companies, as well as for industry suppliers, Michael Makin, president and CEO of Printing Industries of America, and Mark Nuzzaco, government affairs director at NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, weighed in. "The immediate response is that our country now needs to come together. It's important that everyone gets behind our government," notes Makin, who cites the need for laws and regulations that are pro-business and that drive the economy forward. "As so goes a strong economy, so goes a strong printing industry. [Trump and the Republican Party have] a huge task, but also a huge opportunity to drive an agenda."
Makin remains hopeful that Trump delivers on his promise to reduce government regulation and oversight, including less invasive OSHA inspections at printing companies and the repeal of onerous EPA environmental regulations that persisted during the Obama administration.
In terms of Trump's pledge to scrap the Affordable Care Act (Obamacare), Makin points out that the majority of U.S. printing companies do not participate in the health insurance exchange network when it comes to insuring their full-time employees. With that said, however, printing company business owners—and their employees—are quite concerned with rising health care premiums and deductibles. So, a fresh look by Trump and the newly elected 115th Congress at how the U.S. health care system can be reformed and made more affordable would certainly be one step in the right direction.
Nuzzaco agrees that although Obamacare has brought some good things, like the elimination of pre-existing conditions and the ability to extend health coverage for children to age 26, rate increases for printing company owners who provide employee health insurance plans continue to skyrocket out of control.
Nuzzaco is also hopeful that Trump follows through on his promise to lower tax rates for small businesses, while also pointing to the need to allow 100 percent expensing of capital equipment expenditures and a reduction in corporate tax rates. Trump has proposed a 15 percent corporate tax rate (vs. a high at 35 percent), but since many small businesses are creates as S corporations, LLCs and limited partnerships, there are no guarantees at this point that such a reduction would necessarily apply to these types of smaller businesses.
The passage of Postal Reform during the Lame Duck session of Congress remains a key industry initiative as well, according to Nuzzaco, even though it's admittedly not a high visibility topic among the general public. He is also concerned with some of Trump's anti-trade sentiments. NPES remains strongly in favor of passage of the Trans-Pacific Partnership (TPP), but Nuzzaco notes that both Trump and Hillary Clinton had voiced their opposition to the trade pact while on the the campaign trail, even though it was supported by President Obama.
As a long-time political watcher, Nuzzaco does believe it will be somewhat easier overall for Trump to advance his agenda with the support of a Republican-controlled Congress. With that said, he questions whether rank-and-file Republican lawmakers will automatically fall in line with Trump, who campaigned on a platform as being a quintessential Beltway outsider. "Inter-party fighting may become intra-party fighting. There will be tensions between Congress and the White House," he predicts. "And there will still be a need for compromise to settle differences and power struggles between different factions within the Republican party.
"And, like in this case, when there's a unified [Republican controlled] government, they own the outcome," Nuzzaco quips. "They can't scapegoat the opposition."
Mark Michelson is the Editor-in-Chief of Printing Impressions. Serving in this role since 1985, Michelson is an award-winning journalist and member of several industry honor societies. Reader feedback is always encouraged. Email mmichelson@napco.com