Complete Story
07/22/2020
A First Step Toward Recovery for the Printing Industry
Source: Andrew Paparozzi, PRINTING United Alliance, July 7, 2020
Key printing industry business indicators are showing improvement, according to a recent NAPCO Research/PRINTING United Alliance survey. Improvement is over the deepest days of the COVID-19 crisis, and activity is still far below what is normal for this time of the year. But movement off bottom is the first step toward recovery. From early May through early June, our industry took that step.
The survey is part of our COVID-19 Print Business Indicators Research program. The program investigates the economic effects of the pandemic on the printing industry, how printers are responding, and how they can create a path forward. More than 450 companies, including commercial printers, graphic and sign producers, apparel decorators, functional printers, and package printers/converters, participated.
Among all companies surveyed, sales fell 30.2%, on average, from early May through early June, increasing for 17.8% and decreasing for 73.1%. But two months earlier, sales fell an average of 53.7%, increasing for 4.3% and decreasing for 89.5%. As the chart below shows, sales are trending higher for 27.7%, up from 5.6%, quote activity is trending higher for 27.5%, up from 4.4%, and 48% expect business to improve during the month ahead, triple early spring’s 16.2%.
Many we surveyed question whether the uptick is sustainable. An apparel decorator “expects the trend to continue upwards,” but adds, “It is very difficult to assess given so many outside variables and uncertainty. Also, we believe the trend up will be painfully slow and possibly take 18 months.”
A commercial printer reports, “Our sales started dropping on March 13. We hit bottom on April 9. We bounced along the bottom until May 11, when order writing came off the bottom at an increasing rate. It’s impossible to declare a long-term trend from this small data set.”
Companies in every printing segment studied commented on how customers are reopening but “taking a wait-and-see attitude” and on how cloudy the outlook really is: “With talk of a second wave in the fall, and also with PPP and EIDL funds running out before then, I would say we're more hopeful than confident.”
So, what is ahead? Expect the economy to give our industry a boost — but not until 2021. Unprecedented monetary and fiscal stimulus is in place, with more coming. There is also pent-up demand for everything we haven’t been able to do in months. But because this recession is rooted in biology, not economics, the ultimate cure will be biological, i.e., effective, widespread testing and a vaccine. Neither is likely until next year. In the meantime, social distancing, restrictions on business operations, and other realities of the pandemic will continue to encumber the economy.
