Output up but key concerns remain, in latest BPIF Outlook report

By Richard Stuart-Turner, Tuesday 04 August 2015

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Printers have reported cautious optimism for Q3 in the BPIF's latest Printing Outlook study on the health of the industry.

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Jardine: There is no respite for prices and margins on the horizon

More printers who responded to the BPIF survey in Q2 increased their output compared to Q1 (41% compared to 33%). This surpassed the Q2 forecast, with 37% holding output steady and 22% reporting a decline.

A further improvement in output is expected to carry through to Q3, when 43% of respondents expect to increase their output levels, 43% predict output levels will remain the same and 14% expect output to decline in Q3.

The positive output forecast comes despite some concerns among those surveyed over future demand levels and worries about managing labour during the holiday period.

Some printers, as anticipated, reported receiving a boost from work related to the general election but concerns were again raised regarding price sensitivity, particularly in commercial printing sectors.

Confidence in the general state of trade in the industry improved in Q2. More than half (55%) of those asked believe that the general state of trade will remain unchanged in Q3. Of the remaining respondents, 34% believe that it will improve while 12% believe it will worsen.

The forecasts for Q3, while more positive, are also more polarised than they were in Q2. Fewer respondents are reporting stability and a larger proportion are either upbeat or pessimistic.

Competitors pricing below cost remains the most voiced business concern once again with 83% of respondents reporting this as one of their top three business concerns.

Concerns regarding access to skilled labour have continued to increase and this is now second ranked, selected by 36% of respondents. Under-utilisation of capital equipment is third ranked, as selected by 32%.

Other concerns regarded profit levels and late payment, excessive business rates and credit lines becoming restricted.

The study also showed that companies have continued to recruit in Q2 and capital investment plans, for equipment, training and innovation, remained strong. Access to finance is also continuing to improve in 2015.

BPIF research manager Kyle Jardine said: “Firms are working extremely hard; many have been able to grow output and the vast majority remain optimistic about the state of trade in the industry. However, there is no getting around that fact that there is no respite for prices and margins on the horizon.

“Fortunately consumables costs have remained largely stable for most companies - and improving financing and credit conditions should help companies manage their cashflow.”

The BPIF Printing Outlook survey polled 108 companies representing 5,229 staff and a combined turnover of £580m.

Separately, the BPIF has published a flyer entitled 'UK Printing – The Facts and Figures', which has been sent out to BPIF members and will be sent out to MPs and Lords. The flyers will also be distributed at events and to non-members who request them.

The flyer aims to highlight the vital role that print plays in today's economy. It uses data from a wide range of official sources and sets out detailed information on the structure of the industry by region and product, as well as covering its economic importance and its productivity.

It also highlights the effectiveness and sustainability of print as a modern communications medium.

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