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T.The commercial printing industry will grow in 2021. Growth will begin in the second quarter and accelerate through the end of the year. However, no company should expect the boom or shock from weak competitors to do everything right. Much will be different in the post-COVID world. Much of the future profits will be reserved for companies that are already thinking about these differences and figuring out how to take advantage of opportunities and not opportunities.
These conclusions are based on the COVID-19 Print Business Indicators Survey, which is carried out every two months by PRINTING United Alliance and NAPCO Research. Almost 200 commercial printers take part. The diverse group has annual sales between less than $ 1 million and more than $ 700 million and is based in the United States and Canada.
We measure the percentage change in sales in two ways. Year after year, it’s the first year that captures the depth and breadth of the downturn. Among all companies surveyed, sales in the first three quarters of 2020 fell by an average of 16.9% year-on-year and fell by 81.9% – by at least 20% for more than half and by at least 30% for almost a third – and only increases by 17%. One participant speaks for many when he describes what happened that year as a “seismic downturn”.
Changes in the last 30 days compared to the previous 30 days is the second way to keep track of what has happened since the pandemic started earlier this year. (To compare 2020 to 2019, two different worlds need to be compared.) As Figure 1 shows, last spring sales fell an average of 53.7% (30 over 30), with reports of contractions dropping growth reports by 89, 5% to 4.3%. Now sales are increasing slightly, with growth reports exceeding contraction reports by 47.9% to 30.9%. This is movement from below. And it’s the first step in recovery.
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Confidence and capital investment plans also give us an overview of the state of the commercial printing industry in 2021. As Figure 2 shows, only 30.9% of our survey group expect business to improve in the coming month, up from 45.2% in the summer . We still don’t have answers to critical questions like: When can customers work at full capacity? When will the restrictions on in-person events be relaxed? And when will travel and tourism recover?
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Investment plans for capital goods
As Figure 3 shows, only 33% plan to invest in capital goods in the next year, 23.4% do not plan to invest and 43.6% are unsure whether they will invest or not. Here, too, the problem is the uncertainty that goes far beyond the diversity of gardens. (For the minority looking to invest, e-commerce, MIS, prepress / premedia software, digital infrastructure, and bindery / finishing capabilities are the main goals.)
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Where we go from here depends on the American economy. Forces dragging the economy down include re-lockdowns due to the resurgence of COVID-19 cases, the waning impact of the first rounds of fiscal stimulus, and Washington’s failure to provide additional incentives.
And because this recession is in biology, not economics, the recovery will not reach its fullest strength until we travel in comfort, stay in hotels, be in large crowds, and do all the other things we routinely do before Pandemic did. Nobody knows when that will be.
The emerging forces include a strengthening labor market – we have regained more than half of the 22 million jobs lost in March and April – and a monetary stimulus, with more on the way. We also know a lot more about the COVID-19 virus than we did last spring, have better therapeutics, and are very close to a vaccine that, of course, will play a crucial role.
Economists polled by the Wall Street Journal view the forces pulling the economy up as stronger than the forces pulling it down. The consensus assumes that GDP will grow by 3.7% in 2021, well above the average annual growth of 2.3% in the 10 years before the COVID-19 recession. This would create $ 681 billion in additional end products and services – more than combined annual shipments from computer and electronic product manufacturers ($ 333.6 billion), beverage makers ($ 104.7 billion), and Paper / Board Product Manufacturers ($ 193.7 billion).
As the economy strengthens, so does the commercial printing industry. PRINT United Alliance expects total industry revenue (all sources) to increase 2.5% to 4% over the next year, after declining 15% to 18% this year. In US dollars, we expect sales of $ 78.3 billion, more than $ 2 billion better than 2020, but still $ 8.1 billion, or 12.1 percent, less than 2019 before COVID
Levels.
Some of the commercial printers we surveyed are not waiting for growth. They did it by taking advantage of the opportunities created by the crisis: “We went for PPE, face protection, sneeze pads, and so on. That was amazing for us. The pressure is down about 30% year over year. “By entering industries hit by the pandemic such as healthcare, home entertainment, home education and food packaging, sales rose an average of 25.7% in the first three quarters of 2020.
Who are you? They are not a company of any particular size or offer any particular technology, product, or service. Rather, they are conscious, entrepreneurial and agile. These traits will be just as important to participating in recovery as they are to overcoming the recession.
So will think ahead. Priority No. 1 naturally leads our company through the COVID crisis. However, we benefit little from entering the post-COVID world without being prepared for its opportunities and challenges. We cannot think about tomorrow without losing sight of what we have to do today. Many in our research panel are already.
We asked where they see opportunity. Some don’t see any, aren’t sure where they’ll be, or just see it as an ongoing need for PPE, socially distant signage, and COVID-related printing as the pandemic drags on. However, others see opportunities in a number of areas, the most common of which are:
- Targeted, personalized direct mail / printed communication supported by advanced data analysis. We’ve heard a lot about the high ROI this service offers customers, how “more people are getting back into direct mail because they zoomed out and the number of emails is overwhelming. How do you get your message through this? “And through direct mail” again resonated with people – even some who say they didn’t think about using it six months ago. “
- Helping clients rebuild and progress through deeper knowledge of their business. One commercial printer sums it up: “The opportunity is to sell advice and expertise. How can you make money for the customer? Learn more about their businesses. Make use of their website, social media platforms and forums in which they participate. Bring ideas to them. It is especially important now; Everyone needs more business. And everyone will need more business during the recovery. “
- Diversification. Providing services such as fulfillment and kitting for virtual events, as well as large format graphics and signs, has been a critical factor for many commercial printers. The plan is to diversify further because “it is more important than ever” and “old-fashioned companies that only use ink on paper are irrelevant”.
- E-commerce functions. Like diversification, advanced ecommerce features made a difference for many of the people we surveyed. They have expanded their online capabilities to include product demonstration, customer training, marketing, advisory sales, and other critical areas and plan to continue expanding themWith personal restrictions removed, customers can do more remotely.
A common feeling: “E-commerce is getting bigger than ever. If your companionIf you are not ready to compete in the ecommerce space, you will be left behind. “ - Building on the trust created during the crisis. Some companies recognized the severity of the crisis early on, acted aggressively to “win new customers and gain further trust from existing customers”, supported their communities, lived their values and created goodwill. Now they want to build on that goodwill.
Our research panel discussed many other post-COVID options, from mergers and acquisitions to “The weakest competitors are going to close. Other competitors are being sold at prices that are below the market values before COVID “- to” antimicrobial printing “,” contactless interfaces “and” the use of antiviral inks as protective coatings “.
We heard about “Social Media Advertising and Using Virtual Selling to Enter New Geographic Markets,” “Learning How to Create Value for Customers Who Want to Do Business Remotely or whose Workforce is Remote,” and Opportunities in Packaging Retail food when restaurants “close” and more people eat at home. “
Some see opportunities in “stronger domestic production” as supply chains return to the US. Others see it in “increasingindividual dispatch and dispatch services as well as the increasing digitization of records. “
Your enthusiasm is encouraging. This also applies to the commercial printing industry and the American economy. These figures will be revised in the course of 2021. However, all indications suggest that they are being revised up rather than down. Conclusion: an upswing is coming. Let’s be ready for it.
Editor’s Note: Andrew Paparozzi is the Chief Economist at PRINTING United Alliance. The full results of the PRINTING United Alliance and NAPCO Media research are presented in the COVID-19 Print Business Indicators Report, November 2020. PRINTING United Alliance members can download the report from sgia.org/resources/research
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