The forecast for Q3 was for some output growth to return but that expectation turned out to be overly optimistic, the study found, as more companies experienced a decline in output than an increase.
Printers have continued to concentrate on controlling costs, increasing productivity, and looking for new sales opportunities. Some cost pressures have eased, and are expected to ease further, but so too have prices, and lower prices may be required to encourage more output and order growth in Q4, the BPIF said.
The survey found that one third (33%) of printers managed to increase their output levels in the third quarter of 2023, while another third were able to hold output steady. That left 34% experiencing a decline in their output levels.
Forecasts for Q4 are for an improvement in output growth, though the BPIF said this may be more of a case of fewer companies experiencing declining growth rather than a significant seasonal boost.
Output growth is forecast to increase for 36% of companies and 44% predicted that they would be able to hold output levels steady in Q4. That leaves 20% expecting their output levels to fall.
“This Q4 forecast is welcome yet underwhelming for a period that under ‘normal’ circumstances would be expected to experience a stronger seasonal boost,” the BPIF stated.
“Whilst an underperforming economy, with cost-control a paramount concern and increasing pressure to accelerate digitisation in some client markets, presents challenges to some sectors, there are still growth areas within print. Further falls in inflation and a lowering of interest rate expectations will do much to improve business confidence and performance expectations.”
Concern over sales levels has become the new top ranked business concern for respondents, rising from third ranking last quarter, and has replaced competitor pricing as the most selected business concern.
Competitor pricing was still selected by 53% of respondents, down from 56% previously, but concern over sales levels jumped from 41% to 57%. Wage pressures are now the third ranked concern, selected by 52% of respondents, up from 35% and a ranking of fourth last quarter.
BPIF CEO Charles Jarrold said: “It has been a challenging year so far, but it is pleasing to see an uplift in confidence and expectations for the final quarter, even if it’s not quite in line with what might be considered a normal seasonal boost.
“The survey newly reports on uncertainty levels, thankfully they are now expected to stabilise and, with more than three-fifths of the industry with an excellent, or good, cash flow position, there is well-founded hope for the period ahead. A period in which many companies will be looking to exert further control on their costs and explore what diversification options they are well placed to take advantage of.”
The report also found that industry capacity utilisation improved slightly in October, in comparison to July, but remains below what might normally be expected for the time of year.
On sustainability, in October over 56% of respondents reported that they are measuring their carbon emissions, up from 38% in April. 79% said they are working to reduce their carbon footprint, and 35% of these have set emission reduction targets – up from 29% six months ago.
The most popular area of attention for sustainability related investments was waste reduction, as it was six months ago, selected by 76% of respondents. 57% of respondents said they have noticed an increase in demand for sustainable products in the last 12 months.
BPIF economist Kyle Jardine said the sustainability research section to the survey was added again – building on the initial introduction six months ago, as part of the BPIF’s continued commitment to driving sustainability improvement in the industry.
He commented: “Over half of respondents now tell us that they are measuring their carbon emissions – many more than reported doing so back in April. I would strongly encourage BPIF members to download the full report, set aside a few minutes to check out the contents, and consider responding to the next survey in January. This research really does make a difference to how we can represent our industry.”
The survey was carried out during 2-18 October 2023 and received responses from 111 companies employing 7,447 people and with a combined turnover of just under £1.3bn.
