The third quarter of 2019 was a disappointing one for the UK printing industry according to the latest Printing Outlook survey from the BPIF. Both output and orders failed to live up to expectations, and there was no repeat of the seasonal boost experienced last year.
Orders and output had been expected to remain subdued in Q4, so an election surge will be well received said the BPIF. Its Q3 survey shows that 37% of printers polled increased output levels in the third quarter of 2019. Of the remaining respondents 31% held output steady and 32% experienced a decline in output.
In a statement the BPIF said this is the worst Q3 report for three years, since the aftermath of the shock EU referendum result, and particularly disappointing in comparison to the positive Q3 and Q4 performance levels last year.
Pricing pressure and unsustainable pricing in the industry are themes that have been repeated in comments from survey respondents to the latest survey, in particular with reference to competition from online printers. Brexit, and the heightened uncertainty surrounding potential Brexit outcomes and the potentially extremely short timeline for these to be realised, remains a frequently voiced concern of many printers - as does the delay of UK MPs to make any progress and decisions regarding Brexit.
Looking into Q4, printers are now expecting only a marginal improvement in their activity levels. Output growth is forecast to increase for just 26% of companies. Exactly half of respondents predict that they will be able to hold output levels steady in Q4, and 24% expect output levels to fall. That leaves a forecasted balance of +2 for the volume of output in Q4 which, whilst still positive, is lower than the Q3 balance and provides a considerably poor comparison with Q4 2018.
Brexit continues to top the business concerns list - 69% of respondents selected it as one of their top three business concerns (up from 61% in Q3). Competitor pricing is once again held to the second ranking with selection from 49% of respondents (down slightly from 52% last quarter).
Paper and board prices has now fallen out of the top three concerns, it was selected only by 19% of respondents. It has been usurped by late payment by customers (with 24% of respondents selecting it). Survival of major customers had also pushed ahead of paper prices whilst survival of major suppliers has pulled alongside.
BPIF economist Kyle Jardine said: “It is important to point out that all of the survey responses were collected before a new deal was struck with the EU (on 17 October) and therefore before that deal was agreed, in principle if not in practise or timeliness, by UK parliament (on 22nd October).
“Parliament has also subsequently voted in favour of a general election. It now seems likely that a number of printers will benefit from a welcomed boost to orders and output in Q4. We’ll be looking to see if that comes through in the next Printing Outlook survey.”