2014 finished on a positive note but printers are less confident abut Q1 2015 according to the latest BPIF ‘Printing Outlook’ survey.
Orders in Q4 experienced a strong improvement over Q3 and just surpassed expectations for the period. More than half (56%) of printers were able to grow their order levels – just over a quarter (27%) managed to keep orders at a steady level whilst 18% suffered from falling orders in Q4. The resulting overall balance (+38) just crept above the forecast for the period (+37). The Q4 performance for both orders and output extends the positive growth run to seven consecutive quarters.
Expectations for orders in Q1 are less upbeat – though still remaining positive overall. The majority of respondents (54%) believe that they will be able to maintain orders at their current level in Q1; 27% predict that they will be able to increase order levels, whilst 19% expect that order levels will drop. Whilst the resulting balance (+8) is a downward chart movement from Q4 it is, albeit marginally, the most positive Q1 forecast for at least 10 years.
Confidence in the general state of trade in the printing industry remains positive. However, printers are less confident about Q1 than they have been at any point in the last year-and-a-half.
The balance between those believing that the general state of trade improved, rather than fell, in Q4 was +22. This was a reduction from +26 in Q3, but marginally above the Q4 forecast of +21. As with orders and output this is now the seventh consecutive positive result and has come from 40% believing the general state of trade in the printing industry had improved; whilst 18% reported a deterioration. 42% reported no change in the general state of trade in Q4 2014.
The forecast for Q1 is less optimistic - though remains positive. Over three-fifths (61%) believe that the general sate of trade in the industry will hold stable. Of the remaining respondents: 22% compared with 16% believe that the UK print market will improve rather than worsen.
Competitors pricing below cost remains by far the main business concern among printers - on this occasion 85% of respondents noted that this was one of their top three business concerns. The ability of profit levels to sustain required investment levels remained the second ranked concern - this time being selected by 34% of respondents. Late payment by customers has now become the third ranked concern - as selected by 28%. Further concerns were raised regarding output price levels and access to skilled labour.
Kyle Jardine, BPIF research manager, said: “The orders and output results suggest that there was a post-recession period during which expectations were overly optimistic and in which actual performance was subdued. However, since 2013 demand has picked-up and the positive forecasts have been more closely matched. The forecasts for Q1 2015 are less
optimistic than the seasonally boosted Q4 but nonetheless remain positive in what is a traditionally quieter period for many companies. An examination of current order books does seem to support the Q1 forecasts.”
‘Printing Outlook’ this quarter also carried the following information:
* Pay reviews – what have companies done and what do they expect to do?
* Web-to-print - just how much of printing companies turnover is currently derived through W2P?
* How do respondents view the current position of their business?
* Consumables – paper consumption data and printing ink volumes and values.
* A more in-depth look at energy costs.
The report is available free to BPIF members and £40 to non-members.