Mon, May

BPIF highlights Brexit worries

The UK printing industry almost exactly matched the downbeat expectations for Q2, as far as output and orders are concerned but forecasts for Q3 suggests some growth ahead according to the latest Printing Outlook survey from the BPIF.
The membership poll shows that 35% experienced a decline in output, 32% held output steady and 33% increased output levels in the second quarter of 2018. However, 41% of respondents predicted increased output levels in Q3 and 41% expected levels to hold steady. The BPIF said Q2 seems to have been characterised by fluctuating periods of activity and inactivity with significant dependence on the performance of clients’ markets. However, there also appears to have been a consistent reduction in commercial print run-lengths and an increase in ordering delays. Anecdotally, the packaging sector has exhibited more stability but client performance and levels of uncertainty remain a concern. Competitors’ pricing below cost continues to be the most voiced business concern, though only just - the proportion selecting it this quarter is down from last quarter - to 66% (it was 70%, 65%, 70% and 81% in the preceding quarters). Paper and board price concerns remains the second ranked concern - selected by 62% of respondents, down very slightly from 63% last quarter (and 60%, 47%, 42% and 32% in the quarters prior to that). Profit levels being insufficient to ensure investment has maintained its 21% from last quarter, yet jumped to the third concern. The remaining vote allocation splits across poor output prices, access to skilled labour, Brexit and late payment. Kyle Jardine, BPIF research manager, said of the findings: “Brexit was noted to be lurking in the background during last quarter’s report. It’s fair to say that Brexit is now demanding more attention. Whilst the range of attitudes and opinions are varied the consensus is clearly fearful of what lies ahead and concern over how business might contend with the potential shocks and disruptions. We have been actively examining the impact on our industry and representing the industry to Government, now our focus must also turn to developing advice back to the industry.” Both of the BPIF’s Brexit Barometers continue to report negative confidence levels - regarding the outlook for the UK economy during the Brexit negotiation period, and following UK withdrawal from the EU. The barometer for during negotiations has turned in Q3, to increase in its negativity since Q2. In comparison to last quarter, fewer respondents (18%) are now ‘somewhat confident’ regarding the outlook for the UK economy - down from 26% in Q2. Just under one-third (31%) are currently ‘neither confident nor unconfident’ - down from 35% previously. Over two-fifths (42%) are ‘somewhat unconfident’ - down from 33% in Q2. Few respondents (1%) are in the ‘very confident’ category and 8% have now selected the ‘very unconfident’ category. BPIF chief executive, advised: “Capacity, pricing, costs and margins are interconnected and causing pain for many companies in the industry. What can you do? Invest, innovate, improve productivity, limit and flex your costs - by flex I mean, can you make fixed costs in any way variable? Really focus on pricing, look after and value your customers, how can you develop your business? Not just adding work but focusing on what jobs you are making money on, what type of business you need to grow and how might you help your clients’ businesses. Unfortunately this is easier to say than do.”

Upcoming Events