The BPIF’s latest Printing Outlook, a quarterly published study of the health of the industry, found that UK print experienced a very slight upturn in Q4, aided by some election-related activity which helped it to outperform a “subdued forecast” for the period.
The survey found that 34% of printers increased their output levels in the quarter. 38% held their output steady while 28% experienced a decline in output.
The BPIF said this was the worst Q4 report for seven years and immediately followed the worst Q3 report for three years, released in November.
Frequent comments coming through the survey referred to high levels of uncertainty, run lengths declining, margins being squeezed and profits eroded. However, the survey also picked up a number of comments of an industry in transition but some pressures levelling out and stability returning.
The BPIF added a new Conservative majority in government has removed much of the political uncertainty that intensified in the industry through 2019.
BPIF economist Kyle Jardine told Printweek: “The sheer level of uncertainty that’s been going on climaxed in the second half of last year but things are now becoming more certain again.
“So while the quarter was the worst fourth quarter we’ve had for a number of years, as it turned out it still performed slightly better than the pessimistic forecast because of a small amount of election-related work which hadn’t been forecast because the election hadn’t been announced when the previous forecasts were made.”
A number of companies were open about restructuring and their efforts to develop new product lines for profitable clients, while investment intentions for plant and machinery in 2020 are showing positive growth in comparison to 2019.
“The bulk of companies still often say that nothing has changed, and that they are [still investing], but there are companies that will have delayed or postponed projects or an investment cycle because of the uncertainty,” said Jardine.
“Now that the uncertainty is removing and will hopefully stay removed, in time that investment will be back on track.”
Printers are expecting to see an improvement in their activity levels in Q1 2020. Output growth is forecast to increase for 39% of companies, 37% predict that they will be able to hold output levels steady while 24% expect their output levels to fall.
Brexit was no longer respondents’ most-voiced business concern, falling to second after being selected as a top concern by 38% of respondents, down from 69% last quarter.
Respondents were asked if they thought the UK’s business environment would be better or worse following Brexit. The results here also showed a major shift in sentiment, with respondents now holding a considerably less negative viewpoint.
Companies continued to express a range of concerns regarding the impact Brexit may have on their business, however. The primary concern, selected by 75% of respondents, was maintaining a reliable and secure supply chain. General cost inflation was the second most pressing concern, selected by 40% of respondents, just ahead of non-tariff barriers with 39%.
61% of respondents selected competitor pricing as their top business concern in Q4, up from 49% in the last survey, while access to skilled labour completed the top three, selected by 26% of respondents as opposed to 15% in the last quarter. Other concerns ranked outside the top three were paper and board prices, late payment and survival of major customers.
The BPIF also noted some shifts regarding debt and access to finance in the last 12 months – bad debt has increased slightly and the availability of credit lines with suppliers has deteriorated but the availability of bank lending has improved, yet got more expensive.
Carried out from 3-17 January 2020, the BPIF Outlook survey polled 120 companies employing 10,409 people and with a combined turnover greater than £1.4bn.
