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Australian printing industry trends improve in first quarter

Thursday, 20 May 2004
By Print 21 Online Article

According to Hagop Tchamkertenian, Printing Industries Manager of Industry and Commercial Policy, the latest survey results reveal that industry trading conditions, which were expected to deteriorate during the March 2004 quarter, surpassed expectations with strong growth reported in orders, production, sales and net profits.

He said the result represents a deviation from past results. “The March quarter has traditionally been a depressed quarter for our industry in terms of business activity. But based on the survey feedback, the March 2004 quarter saw improvements across a number of areas.”

The key barometer of business confidence, the general business expectations indicator, improved and is higher than the same period a year ago, implying businesses in the printing and associated sectors are more confident now about business prospects.

According to the Printing Industry Trends Survey report, other important March 2004 quarter developments reported by the survey respondents include:

  • Reported increased investment in plant and machinery;
  • Finance reported easier to obtain;
  • Labour reported more difficult to obtain;
  • Reduced levels of employment;
  • Reduced levels of overtime;
  • Reported reductions in inventory levels;
  • Reduced selling prices;
  • Reported increases across all cost categories; and
  • Worse than expected net balance for outstanding debtors.
  • On the critical indicator of capacity utilisation levels, the survey results confirm that when compared to the situation 12 months earlier, capacity utilisation rates were higher during the March 2004 quarter in line with improvements in business conditions.

    Based on the survey results, during the March 2004 quarter, some 70.3 per cent of survey respondents were operating at capacity utilisation levels of 70 per cent or more (significantly up from the 60.5 per cent level reported during March 2003 quarter).

    The March quarter saw 85.2 per cent of the survey respondents ranking lack of orders as the primary barrier to increasing production levels, an outcome that is significantly higher than the 67.4 per cent proportion reported during December 2003 quarter, but slightly lower than the 86.2 per cent proportion reported during March quarter 2003.

    Tchamkertenian maintains the strong trading quarter is now expected to flow into the June 2004 quarter.

    According to the respondents the June 2004 quarter should yield the following results:

  • Net balance increases in orders, production, sales and net profits;
  • No change in selling prices;
  • Further tightening of the labour market;
  • A rise in finance availability;
  • Reduced employment but increased overtime levels;
  • Further increases in all production cost categories – average wages,
  • other labour costs, and average material costs;

  • Declining stock levels; and
  • Rising number of outstanding debtors.
  • Over the next six months (June and September 2004 quarters) the respondents are forecasting:

  • Increased investment in plant and machinery;
  • Increased investment in buildings.
  • Commenting on the state based results Tchamkertenian said with the exception of respondents from South Australia and Tasmania the outlook for business conditions remains favourable during the next six months. “The March quarter also revealed that the highest capacity utilisation rates were reported by respondents from Victoria and South Australia,” he said.

    As for the product sectors relatively high capacity utilisation rates were reported by the Cheques and Securities, Labels, Books, Magazines, Periodicals and Newspapers, and Folding Cartons sectors. The majority of product sectors are forecasting improvements in business conditions over the next six months.

    Capital expenditure intentions also remain positive with most sectors forecasting increased investment during the June and September 2004 quarters.
    Participant companies employing a workforce of nearly 11,000 people from 15 printing and associated sectors covering the printing industry value chain participated in the March 2004 quarter survey.

    Any one interested in obtaining a copy of the full survey report can contact Printing Industries- Hard copies of the report cost $15 for Printing Industries- members and $30 for non-members.

    Electronic copies of the report are also available on request and cost $15 for members and $30 for non-members.

    Contact Hagop Tchamkertenian on hagop@printnet.com.au

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