2025 Economic Outlook for Commercial Printing

Expect business to turn up for the commercial printing industry as 2025 progresses, supported by an American economy benefiting from monetary stimulus, fiscal stimulus, and deregulation. The upturn is likely to be substantial and extended but will not be inclusive: Participation will be limited to companies that use all the tools available — including artificial intelligence (AI) — to maximize productivity companywide, build robust databases and superior data analytics, and embrace transformative change while not losing sight of timeless business fundamentals.

Preliminary results of the year-end 2024 PRINTING United Alliance State of the Industry Survey (SOI) show how business has been trending for commercial printers, and what they have planned for the new year. The 94 who have participated to date are a diverse group, with annual sales ranging from less than $1 million to more than $400 million. Representative of the industry, nearly three-quarters have expanded beyond commercial printing, with 61.3% adding graphic and sign (wide-format) printing, 30.1% package printing/converting, 16.1% promotional product imprinting, and 14% apparel decoration.

Results varied significantly from company to company but were weak overall through the first three quarters of 2024. For example, sales (all sources) increased 1.7% on average, growing for 47.2% but flat for 17.6% and declining for 35.2%. Operating cost inflation moderated, but resistance to price increases stiffened: Among all commercial printers surveyed, operating cost inflation outpaced price increases 3.9% to 2.7% on average. Real (inflation-adjusted) sales, which measures production by stripping price change out of dollar sales, fell 1%, and pre-tax profitability, which closely tracks real sales, was flat or declined nearly 69%.

When asked to comment on their results, an extraordinary 73.8% of our commercial printing research panel reported that the macro environment (the economy, interest rates, inflation, credit market conditions, etc.) has negatively affected their business this year.

Expect better from the economy in 2025 for two reasons. First, productivity continues to increase as businesses make capital investments, embrace AI, and benefit from an expanding labor force. Rising productivity supports healthy gains in employee compensation, confidence, and spending; boosts profitability by moderating increases in unit labor costs; and lays the foundation for noninflationary, long-term growth that lifts living standards. Little is more important to the economy’s long-term health.

Second, monetary stimulus, fiscal stimulus, and deregulation are on the way. No one knows exactly when or how much. After all, it takes time for monetary stimulus to work through the economy, to craft and gain congressional approval for a fiscal stimulus package, and to develop an effective deregulation program. Watch for the economy to accelerate after midyear 2025 and strengthen into 2026. As the economy accelerates, so will commercial printing.

Business Priorities for 2025

But who will participate in the upturn? In the increasingly competitive commercial printing industry, where boundaries between who does what, how, and for whom are breaking down, it’s either prepare for an upturn or be left behind.

For that reason, we asked our research panel about their business priorities for 2025. They have more than 20 in total, ranging from M&A to risk management and cybersecurity, reflecting their diverse circumstances and goals.

Figure 1 lists the 10 priorities cited most often. It’s hardly surprising that increasing productivity, cited by 82.7%, tops the list. Margins are under pressure across commercial printing. Consistently making every process from estimating to invoicing more efficient is essential to fortifying them.

Figure 1 | Click to enlarge.

Capital investment is at the core of productivity plans, with more than 71% of commercial printers surveyed expecting to purchase equipment, hardware, or software over the next year, and just 13.5% delaying investments until interest rates decline.

As in recent years, their most desired capital investments include bindery and finishing, so efficiencies gained earlier in the production process are not lost to post-press bottlenecks; commercial inkjet as a replacement for offset; workflow software and digital infrastructure to smooth workflow and increase production speed; e-commerce to extend automation directly to the client; fulfillment capabilities and print enhancement technologies to increase value added; management intelligence systems to create, access, and analyze robust databases; and wide-format presses to support diversification into graphic and sign production (Figure 2).

Figure 2 | Click to enlarge.

AI applications, cited by nearly one-third, are the new addition to the list of most desired capital investments. As discussed in the State of the Industry Report 2024: The AI/Big Data Revolution, AI applications can automate processes we could never automate before, dramatically increasing productivity companywide. Equally important, every hour saved by automating a time-consuming, low-value task is an hour that can be reallocated to activities that create the most value for clients, employees, and the company.

Other 2025 priorities include the following:

• Strengthening core services, focusing on business fundamentals. It is easy to lose sight of both when change is rapid and disruptive. Commercial printers surveyed plan to “pay closer attention to everything that affects profit,” “bill for things we were giving away,” maintain accurate budgeted hourly cost rates, not allow diversification to become a distraction, and diversify selectively by pursuing opportunities that complement their core services.
• Marketing. Brand enhancement by promoting the full range of the company’s capabilities and the value created for clients.
• Execution. Simply put, doing what they said they are going to do.
• Improving the customer experience. Making it easier for customers to do business with them, reducing customer service response times, etc., because “easy, fast, and responsible mean higher prices and profits.”
• Employee development. Boost productivity, retention, and recruitment by creating career paths through effective training and education. (Nearly 80% have increased base compensation this year, by 4.1% on average, with more than 56% reporting the increases were necessary to retain and recruit employees.)
• Capture higher value-added, more profitable sales. Promoting benefits delivered to clients rather than capabilities alone, “firing bad clients,” and being “selective in whom we will print for.”
• Diversification. Selectively adding products, services, and end markets that enhance core business activities.
• Strengthening business intelligence. Improving KPIs, dashboards, customer analysis, and market analysis for a clear, complete, timely picture of what’s happening internally and externally and to support superior data-driven decisions companywide.

Figure 3 | Click to enlarge.

As Figure 3 shows, 50.9% of commercial printers surveyed expect business conditions to be more favorable next year than they were this year, significantly greater than the 34.4% who expect conditions to be the same (26.9%) or worse (7.5%). The optimism is justified, as current indicators point to a meaningful, durable upturn ahead. The question every commercial printer should be asking: How are we preparing to participate?