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Industry enjoys upswing in second half of the year

Friday, 31 October 2003
By Print 21 Online Article

The results back up anecdotal evidence of full schedules in this traditionally busiest time of the year, with one major company reportedly cutting back on Christmas leave in order to cope with increased orders. Business confidence is back on track with printers more optimistic than the same period a year ago.

The good news is reflected in increased overtime levels and a surge in investment in plant and machinery.

Significantly the increased production failed to spur a growth in jobs with the survey reporting a reduction in the numbers of staff and an increase in levels of wages and overtime. This is in line with the trend towards more automation and greater press capacity throughout the industry. However companies in NSW, Queensland, and Western Australia are forecasting they will take on more staff during the next quarter.

There is no reversal of the long-term trend for selling prices to fall. Companies from all states with the exception of Queensland reported that average selling prices fell during the September quarter. According to Hagop Tchamkertenian, Printing Industries over the outlook period, companies from most states are expecting on a net balance basis either a reduction or no change in selling prices. Only respondents from Queensland are confident that selling prices will increase during the December 2003 quarter.

“The outlook for general business expectations over the next six months remains favorable with survey respondents from all states anticipating improvements on a net balance basis. Queensland continues to be the most confident state with a net balance of 56.3 per cent of survey respondents forecasting improvements,” he said.

Costs of materials rose in all states except South Australia where they declined. Over the outlook period, companies from most states are forecasting increased material costs. The most pessimistic forecasts on material costs are emanating from companies in South Australia.

Despite the improved conditions there is little optimism that it will translate to the bottom line as the fall in selling prices erode profits. “The profitability situation seems to have deteriorated further during the September quarter with respondents from most states reporting on a net balance basis reduced levels of net profits. Respondents from Queensland and Victoria reported improvements in profitability,” said Tchamkertenian.
“If forecasts hold, the December 2003 quarter may see improvements take place in net profits across all states.”

The Printing Industry Trends survey is available from Printing Industries.
Phone: 02. 9248 7300 or visit www.printnet.com.au

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