Idealliance survey reveals that industry sales and pricing power continues to rise

Andrew Paparozzi.
Andrew Paparozzi.

The upturn is continuing in the commercial printing industry in the U.S. with sales, pricing power and confidence all rising gradually in the first quarter of 2018, reports Idealliance Chief Economist Andrew Paparozzi in the Spring 2018 issue of its State of the Industry Update Newsletter. The annual report and periodic updates are sponsored by Canon and distributed exclusively to members of Idealliance, a global thought leader in the graphic communications industry, and a non-profit organization with 11 offices around the world. “Preliminary data shows total commercial printing industry sales from all sources grew 1.6% during the first quarter of 2018,” said Paparozzi. “That follows gains of 1.9% during the second half of 2017, 1.2% for the first half of last year, and 1.5% for all of 2017. And, although total sales of $85.2 billion are still 13.3% below pre-Great-Recession levels, they’re up 10.7% – or $8.2 billion from their 2011 low.” He also points out that this industry growth is not surprising, given the U.S. economy’s recent performance, with the annualized growth rate of the GDP, consumer spending, and business investment all at least doubling between the first and fourth quarters of 2017. “Solid economic fundamentals suggest that this cycle has a long way to run, so we’re sticking with our forecast that a robust economy will help our industry’s sales grow 2% to 3%-plus per year over the next three years,” Paparozzi added. But, he cautions, “Gains due to a favourable swing in the business cycle are short-lived, unless we’re delivering the value that keeps clients in, and the competition out.”

David Steinhardt.
David Steinhardt.

“Survey-based data and knowledgeable insights from the Idealliance Institute for Strategic Research, such as those provided in the State of the Industry Report and Updates, serve as critical strategic planning resources for business leaders in our industry,” said Idealliance President and Chief Executive Officer David Steinhardt. “These reports and our upcoming Institute studies on the mailing industry and media buying trends, will help every industry company make more informed investment and staffing decisions going forward.”

Paparozzi noted that nearly half (48.6%) of those responding to the latest Idealliance State of the Industry Survey said they expect first quarter 2018 sales to exceed those of the same period last year, and more than half (58.1%) of those expecting growth gave at least partial credit to improved business conditions, with two-thirds (67.4%) expecting overall business conditions to be better in 2018 than in 2017. But, he added: “Few are counting entirely on a macro upswing, with more than four out of five (83.8%) crediting actions they’ve taken to capture more work from current clients, adding new clients, winning work from competitors, increasing client retention, and so on, in full or in part for their gains.” Pricing also appears to be moving upward, with 51.4% of survey respondents saying thet their prices are higher, on average, than a year ago, while only 2.8% said they were lower. The average change in prices reported was 1.7% – more than double the 0.8% price increases in all of 2017.

About the Idealliance Institute for Strategic Research. The Idealliance Institute for Strategic Research, under the direction of Chief Economist Andrew Paparozzi, provides timely and accurate analysis of the graphic communications industry’s performance and prospects. Reports issued by the Institute include the Idealliance State of the Industry Series, Capital Investment Reports, and Mailing Industry Report. Regular surveys of the industry are an important part of the Institute’s research. To maximize the validity of its surveys, it builds panels of participants and long-term relationships with members of those panels to encourage in-depth, candid discussion of business and industry issues. Idealliance researchers employ the most effective statistical sampling and modeling methodologies to ensure the validity of their results.

For more information about the Idealliance Institute of Strategic Research studies and trends reports, please contact Andrew Paparozzi at apaparozzi@idealliance.org. For information on membership in Idealliance and exclusive member benefits such as the State of the Industry Report and Updates, please visit www.idealliance.org or contact Idealliance Customer & Services Manager Donna Komlo at dkomlo@idealliance.org.

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Tony Curcio is the editor of Graphic Arts Magazine.