Conflicting forecasts

Out my Window

How will the printing industry fare in the coming year? It’s a question that every manager wonders about.

There is no shortage of pundits and prognosticators providing forecasts and advice, particularly in the U.S. Canadian forecasts are rarer, and statistics are harder to find, but generally follow U.S. trends. So it’s useful to read the statistical summaries and predictions, but it can also be confusing.

For example, PrintForecast.com predicts that total printing industry shipments in the U.S., after a number of years of growth, will be down by 11 percent in 2007 compared to 2006, to about US$82 billion. However, other consultants are predicting a flat, steady-state of shipments, staying around the $92 billion mark they hit last year. PrintForecast itself — the company headed by Dr. Joe Webb — explains that different statistical models and methods lead to different predictions, some more optimistic than others. Still, it’s not an encouraging sign.
The other major printing industry oracle in the U.S., the Industry Measure from Trendwatch Graphic Arts, also has some troubling news: it found that the number of commercial printing and prepress establishments in the U.S. declined by 6.5 percent over 2006. That’s 26,000 companies that closed or were bought out by larger firms.

TrendWatch points out that 48 percent of all the printing establishments in the U.S. are small commercial and quick printers, but they account for only 16 percent of all the shipments in the industry; book publishers, on the other hand, make up 19 percent of the number of establishments, but account for 44 percent of the revenues.

We can see some of the same trends happening on this side of the border, as well. The big guys buy out the small guys all the time — actually, it’s the larger medium-size companies that seem to be acquiring the smaller companies of late. For instance, last fall, Grafikom acquired Grenville Printing Ltd. of Toronto. On the other hand, Grafikom itself is a company formed by a buy-out of part of Quebecor World. So every trend has its counter-currents.

Where the major growth is happening, of course, is online. Consumers and businesses are spending more money through e-commerce, while print and broadcast advertising spending has been declining for many years.
What does this mean for Canadian printers? Dr. Webb advises all managers to have a plan for the worst-case scenario. Work on increasing volumes, but be prepared in case volumes decrease.

And go with the trends: the market is moving online, and many printers have embraced that trend with e-commerce sites of their own, either allowing customers to order printing online or even offering digital, online communications services.
It’s where communication is going.