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Pricing is #1 concern for printers: survey

Thursday, 08 February 2018
By Print21

Revenues – WhatTheyThink Printing Industry Survey

The latest WhatTheyThink Printing Industry Survey of 300 industry executives has found that pricing is regarded as the number one challenge reported by print business owners.

WhatTheyThink’s Forecast 2018 report, by Dr. Joe Webb and Richard Romano – available from $US349 – provides detailed analysis of the most recent Print Business Outlook Survey, the latest industry economic data and macroeconomic trends, as well as industry and cultural technological trends to look out for in 2018.

The survey found that few print businesses have any substantial planned investments for 2018, but of those who do, binding and finishing equipment top the list (see chart below).

The number one item is “bindery equipment for digital production” (26%, up from 22% in last year’s survey). The number two response was actually in the top spot last year: “we have no planned investments,” selected by 21%, down from 25%.

Generally, there are few planned investments industry-wide, and that’s not a great surprise. Most substantial investments in this industry are multi-year investments, and now we’re in a cycle where they don’t need any major new equipment and there’s nothing they find compelling to buy. Back in the 90s and 00s, production software like Photoshop, Illustrator, or QuarkXPress/InDesign was always top-of-investment-list items, as shops prepared and budged for updates and new versions. In the era of Adobe Creative Cloud, where software doesn’t need to be updated the way it used to be (it’s now a subscription model and legacy non-cloud versions are no longer supported), it isn’t thought of as a specific line item.

“Pricing” is now reported by print business owners as their number one challenge (see chart below).

The once-perennial number one challenge – “economic conditions” – has dropped way down the list. The new number one – “pricing” – was selected by 44% of respondents, up from 26% a year ago.

 As the shift to digital printing continues, how to price these items, and in a way that market will bear, becomes an ever-greater issue. This is also due to the high number of 1-9 employee shops responding to our survey; this tends to be a bigger issue for them than for other size classifications. Still, it does indicate how difficult that marketplace is.

Two-thirds of print businesses said they plan to hire staff in 2018, primarily graphic designers, marketing/communications specialists, and prepress operators.

The survey found that 38% of respondents said that 2017 revenues increased by six percent or more compared to 2016, while 33% reported that the number of jobs increased six percent or more from 2016.

In terms of revenues, the strongest businesses are either very small or very large shops, with the mid-size shops experiencing little revenue growth, especially when you adjust for inflation. As for profitability, smaller shops fared better than larger establishments.

“In terms of printing shipments, 2017 was one of the most disappointing years on record, but there are strong sectors and product areas in the industry,” said Dr. Joe Webb. “Executives and business leaders should be cautiously optimistic, but be aware that there are proactive steps that they can take to stay ahead of the pack.”

“We may scoff at the idea of the ‘Internet of Things’ – if we are aware of it at all – but it will have many impacts on not only the market for print, but the nature of print itself,” said Richard Romano. “Industry technology trends of specialty printing, textile printing, and industrial printing are still heating up, we do need to be aware of what is happening with technology in general and how they affect print demand. Many print businesses dismissed the importance of the Internet in the 1990s, and of mobile in the 2000s. We shouldn’t make that mistake again.”

Business challenges – WhatTheyThink Printing Industry Survey:

Planned investments – WhatTheyThink Printing Industry Survey:

The full report is available here.

 

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