The latest ‘Printing Outlook’ report from the BPIF shows that 74% of printers were adversely affected by a decline in output in the second quarter of this year, making it the worst quarterly report on record.
Fewer (11%) were able to hold output steady during the period, whilst 15% actually managed to increase their output. Now that we moving through Q3, printers are expecting activity levels to improve. Output growth is forecast to increase for 36% of companies. A similar proportion (35%) predict that they will be able to hold output levels steady in Q3.
Comments coming through the survey continue to exhibit real diversity in how companies have been affected by and reacted to the ongoing Covid-19 crisis. The Government’s support schemes, particularly the Job Retention Scheme, have been key for many that have accessed them, and are a real concern for those that are still waiting for their loan applications to be approved.
Previously most comments referred to ‘survival mode’ cost control measures and adapting to new markets (PPE manufacture and display graphics) and business models. Many comments are now referring to the lingering uncertainty and the struggle to get sales and orders into the business. However, there have also been some positive comments were clients’ sectors have picked-up or were clients have been reshoring (brought production back from overseas).
Dealing with the economic impact of Covid-19 remains, by far, the most important business concern for businesses; it was selected by three-quarters (75%) of respondents. The top three concerns were, as last quarter, completed by the ‘survival of major customers’ (37%) and ‘late payment by customers’ (35%) - however, both of these have picked-up a smaller proportion of selections on this occasion.
The notable changes in the priorities are a decline in concern regarding the health and safety aspects of Covid-19 but an increase in concerns about ‘competitors pricing below cost’ (from 13% to 24%) and Brexit coming back on the radar (up from 6% last quarter to 27% on this occasion).
The standout issue preventing full recovery from the Covid-19 enforced slowdown is simply insufficient demand levels to sustain business. A ‘lack of demand’ was by far the most commonly selected operational challenge – chosen by 70% of respondents.
The action businesses would most like to see Government take is an extension of the Coronavirus Job Retention Scheme (CJRS) selected by 43% of respondents. However, 39% of respondents were not seeking any further measure to help deal with the financial challenges facing business.
BPIF economist Kyle Jardine said: “In these most challenging times we are eagerly searching for signs of positivity and a pick-up in business. Undeniably Q2 was the worst performing quarter ever, however the recovery is set to get underway in Q3. Expectations for output and orders are more positive, confidence getting ready to recover and capacity utilisation is improving.
BPIF chief executive Charles Jarrold, added: “Dealing with the economic impact of Covid-19 remains the stand out concern for the majority of printing companies. There are justified concerns about how companies will cope if the furlough scheme winds out before demand accelerates enough to contribute to the ramp-up in business costs.
“Responses to the survey make it clear just how undesirable the lingering uncertainty is, and how difficult it is to plan; not an ideal time for Brexit to get back in-the-mix. However, there’s some solace in the fact that we are all in this together; Government is listening, and we are communicating with Government; and some companies will certainly be looking to benefit from clients reshoring back to the UK.”