The US commercial printing and graphics arts industry is not very optimistic about business picking up during the year's closing months, with one in five companies expecting sales to be down during the fourth quarter compared with Q3, a new survey by Semper International has found.
Semper International - the leading US placement firm for skilled help in the graphic arts and printing industry - has been doing a quarterly survey of commercial printers for the past eight years. Their most recent survey of 300 small, medium and large printers focused on Q4 prospects and provided a dose of reality for those in the industry hoping that the slump of the past few years would be over.
The survey did find that 61% of companies surveyed reported a profitable Q3, though that percentage was down from the second quarter. Nearly 80% of respondents also indicated that hiring levels will remain the same, but the number of commercial printing companies laying off workers is up over 2010.
The survey also found that while the current overall US economic climate was their biggest concern, the number of those worried about price wars with lower cost competitors jumped 53%.
In an interview with PrintWeek Semper International CEO David Regan said both the respondents and his company’s own business reflect a marked slowdown in business in recent weeks. "Our business, which is staffing, is a leading indicator of the health of the print industry, so when things slow down, we slow down fast and first," he pointed out. "We immediately see when these printing companies are getting busy and we immediately see when they’re getting slow."
Regan added that while the survey offers a national snapshot, Semper International’s own business shows that there are some current regional differences in commercial printing. "On the East and West Coast it’s slowed down, but the Midwest remains very busy," he said.
But what’s surprising is that Semper International’s quarterly surveys reveal that while the profitability and sales of US commercial printers have risen and fallen in recent years, the biggest factor behind those spikes and ebbs in business is the monetary policy of the US Federal Reserve, specifically the Quantitative Easing (QE) initiatives to put more liquidity into the economy first in 2009-2010 (QE 1) and then later from the fall of 2010 through June 2011 (QE2) to the tune of $600bn.
"When we had QE1, which ran until March 2010, it was as if someone lit a fire under the printing business," he explained, "It really made a difference - we saw an immediate boost in our sales in three or four weeks. There was a definite connection, as companies got busy in not only printing but other areas as well.."
With QE2, which ran through June of this year, Regan said, "Even though gas prices went up, we saw a marked improvement in all levels of our sales and business and our clients noted that as well in the surveys during that time. After they turned QE2 off, things have slowed noticeably each month since, though there are still some busy pockets."
Semper International’s business is both flexible staffing and direct hires, but the company also runs a really large job board, Printworkers.com for the printing and graphics arts industries.Regan noted that he’s seen a change in the skill set these commercial printers now want in new permanent and temporary hires in recent years. "As the printing industry has changed, with many companies moving into marketing and companies now preparing files for PDF and online campaigns, the prepress job has evolved into what we call tech creative—someone who can take a file from an ad agency or from a designer and prepare it for multiple formats," he said. "That skill set is in demand even in this economy."