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Print prices to rise this year – IndustryEdge

Wednesday, 22 August 2018
By Print 21 Online Article
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After more than a decade of flat lining, commercial print prices are predicted to climb this financial year as the impact of industry rationalisation leaves two major print groups dominating the Australian market.

The industry has trailed the manufacturing index in price rises due to an excess of production capacity in the wake of a decline in demand for print. According to the latest IndustryEdge Intelligence Report, too many printers have hung in, chasing too little work with lower prices because they already had the benefit of invested capital in equipment along with cheap debt since the GFC. But times are changing.

Tim Woods, MD IndustryEdge

Tim Woods’ team at IndustryEdge give four predictions why they believe prices are set to rise faster than inflation this year.

Prediction #1: Five into two-sector competition retained but its more rational.

The overdue rationalisation of the commercial printing sector has resulted in Ive Group and PMP dominating the Australian and to some extent the New Zealand market. This is predicted to help drive rational price movements.

Prediction #2: Trade in print equipment will decline further.

While a large number of pieces of printing equipment are still being exported they are of declining value. IndustryEdge believes this shows the major operational rationalisations of recent times have stopped. Most equipment is now being exported to Pacific Island nations.

Prediction #3: Prices of commercial printing paper will rise further.

Price rises for printing paper in the first quarter of 2019 will be as much as 7%, following this year when the average price rose for the first time in a decade. Higher sustained pulp prices, increases in freight charges and a devalued Australian dollar all contribute to the near certainty of further price rises.

Prediction #4: Printing paper demand will decline by 4% (approx.) next year.

Following on from this year’s drop of 3.4%, IndustryEdge predicts a further 4% drop in demand during 2018-19. While full details will only be available in the annual Pulp & Paper Strategic Review, there have already been large adjustments for some grades.

The Intelligence Report expects print specialisation, coupled with the rationalisation will deliver a long-sought increase in value for printers.

It suggests that … ‘Higher price [will] offset slower demand.’

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