Seasonal upturn takes effect but concerns remain

By Max Goldbart, Wednesday 15 February 2017

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The industry's seasonal Q4 upturn was better than expected last year, although output was down on the same quarter in 2015, the latest survey shows.

jarrold

Jarrold: "Firms are clearly looking for opportunities with some optimism and confidence"

According to the BPIF’s quarterly Printing Outlook survey more than two fifths (43%) of printers increased output levels in Q4 of 2016. The same proportion held their output steady and just 14% experienced a decline.

This led to a positive output balance of +29 (the difference between the increases and the decreases), which was an improvement on the predicted forecast in Q3 2016's survey of +21 but lower than the previous year’s balance of +41.

While it is expected that in the wake of the rush, Q1 2017 will struggle compared to Q4, the predicted balance for the next quarter is at +18, with 40% of respondents believing output will increase. If realised, this would lead to the highest Q1 output balance for three years.

Confidence in the general state of trade improved on Q3 2016's figure but remains subdued in comparison to recent years. 

In the wake of last June’s Brexit vote, the BPIF for the first time introduced a new section looking at confidence during the Brexit negotiation period. More than one third (36%) of respondents are ‘somewhat confident’ regarding outlook, with 31% ‘neither confident nor unconfident’ and 24% ‘somewhat unconfident’.

This led the BPIF’s newly-introduced Brexit Barometer, monitoring how confidence changes over time, to land at a ‘somewhat confident’ balance of +14.

 “The new BPIF Brexit Barometer provides further evidence of the resilience of the UK printing industry,” said BPIF chief executive Charles Jarrold.

"Earlier BPIF research showed that there were many concerns about the impact of Brexit – but now that it is about to become a reality, firms are clearly looking for opportunities with some optimism and confidence."

In the aftermath of Brexit, many industry figures claimed it to be a challenge and an opportunity

Once again, competitors pricing below cost continued to be the most voiced concern in the industry, cited by 76% of respondents as a main concern (up 14% from the previous quarter). Additional comments referred to concerns over the effects of trade print sites offering undervalued print.

Trade printer Route One e-commerce director James Kinsella said that the trade print market was "without doubt a very competitive space".  

"Print resellers need to buy at prices that allow them to make margins on the products they resell and steps in industrial-scale print production have reduced production costs in many areas. The challenge for the industry is finding the balance where both sides win and print doesn’t become undervalued," said Kinsella.

The second most ranked concern was paper and board prices, selected by 39% of respondents, as price rises take hold. Access to skilled labour remained the third-ranked concern.

The survey was carried out during a two-week period from 4 January and received responses from 80 companies employing 3,116 people with a combined turnover of £375m.

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