The latest ‘Printing Outlook’ survey from the BPIF reveals that whilst 49% of responding printers maintained output levels in the first quarter of 2016 and 25% were able to increase output, 26% experienced a fall. The resulting balance (the difference between the ups and the downs) was -1; well below the forecasted balance of +33, and the first negative balance since Q1 2013.
The negative balance should be short-lived as printers expect output to recover quickly in Q2. Exactly half of respondents expect to increase output levels, 38% predict that output levels will remain the same and 13% expect output to decline in Q2. The forecasted balance of +37 would, if realised, be a significant upturn from Q1’s marginally negative balance and bring output performance back to between that experienced in Q3 and Q4 last year.
Confidence in the general state of trade in the printing industry receded in Q1, largely offsetting the recovery experienced in Q4. The rebounding Q1 forecast suggests that confidence in the industry is currently precarious and liable to fluctuate as it is influenced by uncertainties in the industry and the economic environment.
The balance between those believing that the general state of trade improved, and those believing that it had deteriorated, was +2 in Q1; significantly below the +25 in Q4, and less than the Q1 forecast of +10. The marginally positive balance for Q1 has come from 32% believing the general state of trade in the printing industry had improved and 30% reporting a deterioration. 38% reported no change in the general state of trade in Q1 2016.
If the forecasts prove to be accurate (and with the exceptions of Q1 and Q3 2015 they have been), confidence is set to return to more positive territory in Q2. Exactly half of respondents believe that the general state of trade in the industry will remain unchanged. That leaves 40% expecting the UK printing industry to improve, and 10% expecting that it will deteriorate, in Q2
Competitors pricing below cost continues to be the most voiced business concern; it was selected by nearly three-quarters (74%) of respondents as one of their top three business concerns. Concerns regarding profit levels being insufficient to encourage investment have mounted to make it the second ranked concern (27% in Q1, up from 22% in Q4). Weak productivity levels has now emerged as the third ranked concern – this was selected by 25% of respondents in Q1, up from only 7% in Q4. It is possible that this area has shot to prominence as the issue of UK productivity levels has received national media coverage at the time of the latest survey. The more frequent top three concerns of access to skilled labour and late payment aren’t too far behind.