Print Outlook Speakers Predict Continued Growth

According to speakers at Print Outlook 06, despite the loss of some $200 million in print revenues due to Hurricane Katrina, the industry has shown strong growth in 2005 to continue the rebound that began last year. By streamlining their production and developing new ways to deliver value to clients, printers are speeding the industry’s transition to successful communications industry for the Internet Age.”

Those were the themes of Print Outlook 06, the 25th edition of the economic and marketing conference sponsored by NPES The Association for Suppliers of Printing, Publishing and Converting Technologies, held in Arlington, VA. NPES is a U.S. trade association representing more than 400 companies that manufacture and distribute equipment, systems, software and supplies used in a variety of printing, publishing and converting processes.

The conference program combined presentations on national economic trends with specific discussions of print advertising, direct mail and other market niches, and presented panels of printers and packaging converters to review key issues in their own daily businesses.

Dr. Ronnie Davis, Printing Industries of America (PIA) chief economist, reported that “the good times are continuing,” despite the loss of approximately $200 million in print business along the Gulf Coast in the fall.

Through the first nine months of 2005, total print industry shipments were up 3.8 percent, and a majority of printers have reported increases sales, Dr. Davis said.

“As long as our mature economic recovery continues, I think we can forecast good times for print,” Dr. Davis said. “By the end of 2006, we could be back to having the highest print revenues ever.”

Michael Evans, NPES consulting economist, reviewed national economic trends, and predicted that although “there is not going to be a recession next year, growth is going to slow down.”

According to Mr. Evans, the outlook for new investment in major industrial equipment is cloudy, partly because of low capacity utilization of existing equipment. Capacity utilizationis approximately 75 percent now, while 80 percent is considered a threshold at which new investment begins to occur and 85 percent would represent a ”boom time.”

Several speakers forecast conditions for print advertising and promotional media. Brian Wieser, vice president and director of industry analysis Magna Global USA, noted that so-called “below the line” marketing expenditures – on such activities as direct mail, event sponsorship, sales promotion and point-of-purchase displays – now exceed spending on traditional media advertising.

“Marketers are increasing their budgets,” Mr. Wieser said. “Dollars are way up, and the money is not going to media, it’s going elsewhere.”

Direct mail and catalog marketing should also remain healthy, though under growing pressure. Consultant William Lamparter presented the preliminary findings of a new study on the future of print catalogs by the Print Industries Market Information and Research Organization (PRIMIR).

He cited volume growth data in several market categories, and described the emergence of a new “multi-channel retail” environment in which catalogs, web sites and retail stores are used interchangeably as selling tools.

Bruce Biegel of Winterberry Group in New York also presented data on the role of catalogs and direct marketing in the overall marketing mix today, noting that acquisition of new clients has become the chief objective of direct mail. In 2005, some 70 percent of all direct marketing will be done withthe aim of recruiting new customers.

In many organizations today, Mr. Biegel noted, the marketing function has been re-assigned to report to the procurement department, increasing the demand for marketers to demonstrate return on investment for their projects.

Rochester Institute of Technology professor Frank Cost, who keynoted the first day of Print Outlook 06, told attendees the key question now is “How can the printing industry transform itself into a successful communications industry for the Internet Age?”

Mr. Cost noted that the traditional print model consists of “islands of automation in a soup of craft-based labor,” and is effective in markets where craft labor is cheap, like India. But this model brings with it long lead times, high supply chain costs and other drawbacks.

According to Mr. Cost, print’s challenge today “is not just a matter of making traditional processes leaner, but of creating entirely new processes.”

For more information on Print Outlook 06 and the NPES, contact NPES, (703) 264-7200; e-mail: npes@npes.org; web: www.npes.org.