NAPL State of Industry Update Helps Printers Prepare for Expected Economic Slowdown

PARAMUS, NJ—10/12/2006—The NAPL 2006 State of the Industry Update: Preparing for a Slowdown explores how graphic communications companies can help prepare for the slowing in the economy that’s likely as we move toward 2007. Recently released by NAPL (www.napl.org), the trade association for excellence in graphic communications management, the State of the Industry Update explores how a slowing economy will affect printing company clients; how printers can gain a strong foothold with their customers, and how they can protect their already pressured bottom lines.

“For every one percentage point slowdown in the gross domestic product—GDP—print sales drop by more than $1 billion,” said Andrew Paparozzi, NAPL vice president and chief economist. “Therefore, when we see the economy slowing from 3.5% - 4% growth to more like 2.0% - 2.5% growth, it’s very significant.”

Paparozzi notes, however, that “graphic communications company leaders should not feel helpless about an economic slowdown. There is plenty they can do to prepare their companies so their organizations can be stronger coming out of the economic slump than they were going into it.”

The State of the Industry Update explores the various factors behind the forecasts of an impending economic slowdown and offers practical strategies printers can implement to protect their companies. “It’s important that printers begin to prepare for the slowdown now and not be caught off guard,” said Joseph Vincenzino, NAPL senior economist, advising that graphic communications companies:

-- Continue/enhance efforts to achieve productivity gains and efficiencies.

-- Review employment needs carefully and frequently; don’t ignore organization development.

-- Continue to pursue service diversification if that aligns with overall strategic objectives.

-- Monitor how the economy (local, regional, national, and international) may impact clients.

-- Be prepared to help clients meet their business challenges.

The State of the Industry Update also provides a valuable tool to help printers assess their current status and strengthen their positioning as the slowdown approaches. Called “Questions to Ask Before the Slowdown Hits,” the exercise helps companies focus on the critical areas to address at this critical juncture.

As the expected slowdown approaches, the printing industry is experiencing its fastest growth rate in years—up 5.7% in August, 2006, after growing 6.4% in July and 7.2% in June. Year-to-date sales (as of August) were up 6.5%--the strongest growth over the first eight months of any year since 1998.

However, as NAPL reports, only the most efficient and productive companies are growing profitably. The rest are caught in a classic profit squeeze, since hyper-competitive markets won’t tolerate raising prices enough to fully offset accelerating costs.

The economic analysis in The NAPL 2006 State of the Industry Update comes from NAPL’s Printing Economic Research Center (PERC), which produces research and publications sponsored by Heidelberg, Kennesaw, GA. The in-depth analysis provided in NAPL’s economic reports is enabled by the ongoing relationship NAPL economists have developed with a broad base of printing and graphic communications company executives.

“We’ve successfully recruited the active participation of hundreds of executives who are thinking seriously about their businesses and their industry and who welcome being challenged on their thinking,” said Paparozzi. “This enables us to tell printing company executives what they can expect in the business environment so they can minimize the number of surprises and not be caught unprepared for challenges or for opportunities.”

About NAPL
Chartered in 1933, NAPL (www.napl.org) is a not-for-profit trade association representing companies in the $100 billion+ graphic communications industry and dedicated to excellence in graphic communications management. NAPL’s comprehensive slate of business-building solutions provides company leaders with the strategies, insights, and guidance they can use to make informed business decisions, minimize risk, anticipate change, and profitably grow their business. For more information on NAPL, visit www.napl.org or call (800) 642-6275.