The new BPIF ‘Printing Outlook’ survey shows 45% of printers increased output levels in the first quarter of 2017. A further 37% held output steady whilst 18% experienced a decline in output. The resulting balance (the difference between the ups and the downs) was +27 - only marginally down from +29 in Q4. The latest Q1 balance compares very favourably to last year’s equivalent Q1 balance of -1, and is the most positive Q1 report for three years.
Output growth is expected to hold steady into Q2 with respondents being relatively positive about their work volumes. Two-fifths of respondents predict that they will increase output levels in Q2, a further 49% expect output levels to hold steady. Just 12% forecast that output will fall in Q2. The forecasted balance of +28 would, if realised, be the most positive Q2 for at least 12 years.
The BPIF states that confidence in the general state of trade in the printing industry has continued to improve from the lows experienced in mid-2016. Output and orders growth have remained positive, on balance, and confidence in the general state of trade amongst survey respondents continues to improve.
Competitors pricing below cost continues to be the most voiced business concern – this was selected by over four-fifths (81%) of respondents, up from 76% previously, and the survey continues to pick-up comments referring to price concerns stimulated by the activities of trade print websites and a view that they are undervaluing print.
Paper and board prices remains the second ranked concern; this was selected by 32% of respondents (down from 39% last quarter).
Concern that profit levels are insufficient to provide for sustained investment has now supplanted access to skilled labour as the third ranked concern.
Now that Article 50 has been triggered and the negotiation clock is ticking, survey respondents have become less confident regarding the outlook for the UK economy during the Brexit negotiation period. Recently introduced questions to the survey have established that nearly one-quarter of respondents (24%) are now ‘somewhat confident’ regarding the outlook for the UK economy; down from 36% in Q1. Almost half (47%) are currently ‘neither confident nor unconfident’, up from 31% previously; and just over one-fifth (21%) are ‘somewhat unconfident’. The remaining respondents were split evenly between ‘very confident’ (4%) and ‘very unconfident’ (4%) in Q2.
Using these figures the BPIF has established a ‘Brexit Barometer’. The actual weighted balance is 2 - which places the current Brexit barometer for the UK economic outlook during the Brexit negotiation period just into the positive side of the scale; and at the lower range of the ‘somewhat confident’ zone. This represents a downward shift in confidence from the 14 reported in Q1.