Semper Survey Reveals that the Printing Industry Is Moving into a New Positive Economic Cycle

BOSTON—August 7, 20114—Semper International, the leading placement firm for skilled help in the graphic arts and printing industry, will shortly publish its quarterly survey offering estimates of trends in the printing and graphics industries—something it has done since 2003. In a preview of findings that it has released to Printing Impressions, it found evidence of a revitalized printing marketplace. At long last, it seems that the industry may be starting to witness the economic turnaround that we have been hoping for.

Indeed, the report shows evidence of a true business surge in nearly every category it measured in the third quarter—including the highest percentage of companies reporting profit in years.

Key Insights from the Semper Report

Based on data from hundreds of business owners, the Semper Report found strong evidence that our industry is sitting on the precipice of an economic inflection point. Everything from current profit and revenue numbers to anticipated sales and hiring data all indicate we are moving into a new economic cycle, at long last.

Insight 1: Quarter/Quarter Revenue Grew 8 Percent

The first sign of life in this overwhelmingly positive third-quarter survey lies in the realm of revenue, which saw near double-digit growth to 8 percent this quarter. After nearly eight years of fairly anemic bottom line performance, this statistic is clearly encouraging.

At the same time, the companies expecting a decrease in sales have fallen to the lowest level in the 10 years Semper has been conducting its survey—to just 5 percent.

Question: How does this [your revenue] compare to last quarter?

Insight 2: 80 Percent of Printing Companies Were Profitable in the Third Quarter

Another positive sign of change are the 80.9 percent of respondents who reported having a profitable quarter—a significant jump over last quarter. In fact, 80 percent of firms in the black is the best economic showing Semper has seen since before the financial crisis started in ‘07.

It would be great to start to see consistent demand. The ups and downs make business investment very difficult, but this positive information is surely a good sign for the upcoming quarter.

Question: Did your company have a profitable first quarter 2014?

Insight 3: Despite a Summer Slowdown, Sales Remain Relatively Strong

This quarter, sales data showed some interesting trends. While Semper saw sales increases drop just slightly this quarter—down to 32 percent from a high of 38 percent last quarter—Semper also saw a majority of firms (50 percent) report that sales stayed the same quarter-over-quarter.

This consistent sales data is actually a great sign, as sales around the Fourth of July period are typically a bit weaker— so steady levels actually show signs of growth.

Another positive sign is that most companies are reporting less of a slowdown, with just 18 percent of firms seeing decreased sales in the past two weeks. If we remember that a large number of firms reported growth last quarter, this means that they are continuing to see consistent levels. Again, this is an encouraging sign for the bull camp.

Question: How have sales changed in the last two weeks?

Insight 4: Profitability Remains a Core Concern

This quarter’s data clearly illustrates a transition point in the labor market. As Semper has witnessed in a number of past labor cycles, companies today seem transfixed between two business conditions.

First, the numbers clearly show a sub-set of companies trapped in a “less is more” paradigm, as they continue to deal with legacy recession conditions. In evidence, 24 percent of companies reported limited staffing due to economic conditions, indicating they are afraid to hire this quarter. Similarly, 33 percent are concerned with the ramp-up time on ROI of hiring a new team, which generally indicates they are concerned with keeping their team busy enough to make a profit.

Other companies are starting to show evidence of their transition into the next phase of the hiring cycle, where labor becomes a more precious commodity, and focusing on personnel investments is a requirement for future productivity. Indeed, a full 20 percent of companies indicated they recognize the need to better capitalize on new business opportunities by solving these staffing issues and hiring new assets.

This shift moves the staffing market from one where labor is cheap and plentiful, to a new reality where labor is constrained and the demand for top employees dramatically exceeds the supply—a condition Semper expects to become more prevalent in the next several quarters.

Question: What is your biggest staffing challenge?

Putting it All Together

Together, the Semper report data shows change in the economic fortunes of their reporting companies. In fact, the over 80 percent of firms in the black is the best economic showing the report has seen since before the financial crisis began in ‘07.

Firms expect to be busy in the upcoming months. Strong sales projections also coincide with external data; for example, the first government GDP report released last week showed 4 percent overall growth. While Semper feels this number may be a bit high for the printing industry just yet, it is certainly trending in the right direction.

What does this mean to a company’s staffing considerations? Some firms are showing evidence of their transition into the next phase of the hiring cycle, with 20 percent indicating they need to better capitalize on new business opportunities by solving these staffing issues and hiring new assets.

At the same time, expect to see some early supply/cost issues come to the fore, specifically regarding base labor pay and overtime concerns. When coupled, these numbers indicate that hiring will become a much more serious concern over the coming quarters. As Semper has seen this cycle before, they feel hiring will become a much bigger concern than many companies currently expect in the coming months.

For complete copies of the study, readers can access http://bit.ly/semper_survey_2014_Q3. If they would like to participate in future quarterly surveys, they can e-mail always@semperllc.com.

Source: Semper International.