Print Market Analysis -- Bearing the Market
Having emerged from the recent election with the first popular vote majority since 1988 and firmer control of Congress, George W. Bush is pushing ahead with some of the programs he championed during the recent campaign.
Top of the list is a restructuring of the nation's creaking Social Security scheme, followed by reforms of America's tax and tort systems. All three reforms, however, will face stiff opposition from powerful, and entrenched, interest groups.
The crisis in Iraq continues to sap Mr. Bush's political capital, as the Iraqi elections look less and less likely to quell the insurgency. America's economy will remain strong, despite widening deficits in both the budget and the current account. A group of forecasters surveyed by The Economist predicts GDP growth of 3.5 percent in 2005.
A Look Ahead
So what's ahead for our industry? The two largest factors on industry sales—economic growth and advertising expenditures—are forecasted to improve in the near future. And the ban on telemarketing will continue to buoy the direct mail industry. As of 2004, printing in America constitutes a $170 billion industry with one million workers and 45,000 establishments.
| U.S. PRINT MARKET SEGMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in Millions of U.S. Dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005(E) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMERCIAL PRINTING | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Commercial Printing | 48,823 | 49,461 | 52,179 | 51,195 | 51,253 | 46,000 | 44,770 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Magazines & Periodicals | 7,952 | 8,822 | 8,759 | 8,119 | 8,006 | 9,105 | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Catalogs/ Directories Printing |
9,139 | 9,866 | 9,809 | 9,507 | 10,600 | 11,758 | 12,596 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct Mail Printing | 7,079 | 8,481 | 7,378 | 7,612 | 7,614 | 7,172 | 7,200
| Inserts & Coupons Printing |
6,172 |
6,500 |
6,555 |
6,600 |
6,700 |
6,450 |
6,600 |
Book Printing |
5,508 |
6,249 |
6,021 |
5,985 |
5,454 |
6,249 |
6,650 |
Financial Printing |
4,501 |
5,499 |
5,319 |
5,200 |
4,200 |
3,568 |
3,110 |
Newspaper Printing |
14,148 |
14,813 |
14,513 |
14,600 |
14,700 |
14,200 |
14,490 |
TOTAL |
103,324 |
109,693 |
111,534 |
109,819 |
109,526 |
104,489 |
103,500 |
SPECIALTY PRINTING |
Specialty Printing |
8,994 |
9,380 |
10,245 |
11,082 |
10,202 |
10,230 |
10,180
| TOTAL |
8,994 |
9,380 |
10,245 |
11,082 |
10,202 |
10,230 |
10,180 |
FORMS & LABELS PRINTING |
Business Forms Printing |
6,297 |
6,216 |
6,007 |
5,438 |
5,691 |
4,260 |
3,950
| Labels & Wrappers Printing |
4,341 |
4,614.6 |
4,633 |
4,610 |
4,710 |
4,650 |
4,830 |
TOTAL |
10,638 |
10,830 |
10,640 |
10,048 |
10,401 |
8,900 |
8,720 |
PACKAGE PRINTING |
Package Printing |
34,787 |
37,152 |
37,529 |
37,200 |
37,300 |
36,100 |
36,800 |
TOTAL |
34,787 |
37,152 |
37,529 |
37,200 |
37,300 |
36,100 |
36,800 |
TRADE SERVICES |
Prepress Services |
7,110 |
7,693 |
7,913 |
7,600 |
7,300 |
7,000 |
6,950 |
Trade Binding |
4,207 |
4,396 |
4,623 |
4,580 |
4,600 |
4,400 |
4,465 |
TOTAL |
11,317 |
12,089 |
12,536 |
12,180 |
11,900 |
11,400 |
11,415 |
PRINTING & GRAPHIC ARTS INDUSTRY |
|
169,062 |
179,148 |
182,485 |
180,330 |
179,329 |
170,130 |
172,570 |
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The U.S. economic boom significantly encouraged Canada's rapid growth during the 1990s, as well. The United States is Canada's largest trading partner, and the U.S.-Canadian economic relationship is the largest that has ever existed between two countries.
Printing is a roughly $13 billion industry in Canada. Imports from the U.S. alone were $847 million in 1998. Canada remains the largest purchaser of U.S. printed materials, accounting for approximately 40 to 45 percent of the U.S. export total.
More than half of the U.S. printers in the "2005 Markets in Print" survey were able to increase their print sales over the previous year's sales totals. Generally, more smaller printers were able to grow their print sales in 2004 than did larger printers. Nearly every printer surveyed expects 2005 to be a good year for printing. Ninety-eight percent expect to increase their print sales over 2004 final print sales.
To explore the impact of non-print operations versus print operations in printing companies, printers were also asked to describe their non-print sales. Of the 73 percent of respondents that report some of their sales coming from non-print activities, about the same number of printing companies (87 percent) reported that non-print sales in 2004 increased over non-print sales in the previous year.
This data is based on research conducted by C. Barnes & Co. for its "2005 Markets in Print: Annual Report on the Printing Industry." For more information or for ordering, visit www.cbarnes.com, e-mail info@barnes.com or call (207) 442-0588.
Top 10 Concerns
The top business problems reported by survey participants include (ranked by number of references):
1. Competitive Pricing—In an effort to keep their presses running, printers are aware that their competitors are pricing many jobs far too cheaply.
2. Trying to Increase Sales-Printers are struggling to increase their sales more than they have in the past.
3. Labor and Benefits Cost—Costs for healthcare, insurance and benefits on top of salaries are squeezing margins.
4. Finding and Keeping Skilled Labor—Hiring knowledgeable employees (specifically salespeople) and replacing an aging labor workforce are particularly problematic for printers.
5. Cost of Materials and Technology—The rising costs of paper, ink and consumables, as well as buying new technology are also squeezing margins.
6. Getting Investment Money—Finding money to buy new technology and expand is difficult.
7. Faster Turnaround Times—The immediate demands of clients are increasingly troublesome.
8. Lower Profitability—Higher costs and lower sales are squeezing margins.
9. Lack of Customer Loyalty—Printers are discouraged by their clients running to lower prices.
10. Printing Volume—Increasing volume and keeping volume consistent is a problem.
