Its official: revenue for printed products in the UK is on the up and, as long as that trend continues, printers have plenty to look forward to. Choking on your cornflakes? Given current trading conditions for much of the industry, you wont be the only one.
But figures from the Government’s Office of National Statistics (ONS) show that between 2004 and 2005, sales made by commercial printers rose 4.1% to £13.2bn – significantly higher than inflation for that year, at around 2.8%. Even better, that was the second year of growth on the hop following the advertising crash in 2003, and the best year for sales since 2000.
The numbers, published last week in a report from the BPIF, tell a story of an industry trying to maintain and grow sales, despite the much-feared threat from online communications and cheaper overseas competitors. Huge growth in certain sectors, such as newspaper production and the printing of tickets and programmes, drove the overall rise in sales, despite dips elsewhere, most notably in marketing and advertising collateral.
BPIF information services manager Kyle Jardine, who wrote the report based on the ONS figures, argues that the figures are “great news” for UK print. He says: “It must be encouraging for firms in the industry to know that markets do still exist for printed products and that particular sectors can experience growth – even at a time when some of the traditionally important products linked to marketing and advertising are contracting.”
Spend on marketing and advertising literature, according to the statistics, clocked up its fifth year of decline on the trot, with a 4.3% fall between 2004 and 2005. It has dropped around one fifth since 2000. Jardine says that the figures are to be expected given the growing diversity of the marketing mix – in this sector, it seems clear that the growth in email, online and SMS marketing is taking its toll on the once-essential printed product.
Growth elsewhere, though, reflects major changes in the media landscape. Sales of newspaper print, for instance, jumped almost a third between 2004 and 2005, going against the received wisdom that circulations are declining. While it is not clear whether this figure includes the costs of publishers printing on their own presses, the growth does suggest a significant upswing in contract printing, much of which was driven by the launch of free newspapers across the UK during 2005.
More surprisingly, sales figures in the ONS’ category for programmes, tickets and compliment slips grew by almost a fifth between 2004 and 2005, driven mostly by a huge rise in basic business stationery items such as compliment slips, letterheads and business cards. Sales for these products had grown steadily since 1997 prior to the jump between 2004 and 2005; again, the figures seem to go against the idea that such commoditised areas of print – and the prices they command – are declining.
Elsewhere, the growth in digital printing was highlighted by an upturn of just under a tenth in what the ONS categorises as printing onto plastics, glass, metal, wood and ceramics. The upturn, likely driven by the increasing number of large-format flatbed inkjet machines, also hints at a burst of creativity from the advertising industry.
The ONS figures, however, reveal a slight decline in the total turnover of companies that it classes as being in the print sector, edging down 0.4% to £15.14bn. These total sales include services offered outside of pure printed matter – digital asset management, design, data handling and the other added-value services that have become part of the mantra of how to run a print business.
Jardine says that the total turnover figure may be misleading, as the ONS only includes companies it classifies as printing firms and does not include some firms that may produce print but whose main income comes from other activities. Moreover, some of the more innovative printing firms whose main revenue now comes from non-print services may not be classified by the ONS as print firms, meaning that their turnover would simply drop off the total figure.
Despite the slight decline in total turnover, the ONS figures suggest two things: first, that the internet is not proving the threat it was once believed to; and second, that they can face the market with some confidence that demand is not dropping from under their feet. Taken alongside the BPIF’s most recent ‘Directions’ report in March, which hinted at improving prices – albeit thanks to the heavy toll of consolidation – the industry can be justified in looking at the rest of 2007 with measured optimism.
The full report, ‘UK printing industry turnover 1995-2005’, can be downloaded from www.printdata.org.uk and is free for members.