Foreign printing market trends

The national economy of the United States is slowly recovering. However, printers cannot expect that economic growth will automatically bring profits. The printing industry is facing the problems of persistent overcapacity and large number of mergers, and fundamental changes have taken place. Full understanding of these changes is the key to success in the new situation.
According to President of PrintCom, William Lamparter, “The printing industry should keep a clear head. We are in fierce competition.” He said that the current print quality and cost efficiency are better than ever. However, changes in customer needs and market concepts are fundamentally changing the business prospects of the printing industry.
He said that overall, the printing business has abandoned bulk distribution and adopted customized services. Printers should grasp this change and provide value-added services in their businesses.
Charles Pesko, CEO of CAP Ventures, said, “If you want to achieve annual business growth of 1% or 2%, you have to seek services other than printing. According to print buyers and printers’ forecasts, business will not be in the next 6 months. There is a big improvement."
Even in the second half of 2003, the expected growth will not be too great and the business will not fully recover. He pointed out that the industry consolidation will continue and accelerate the pace.
Pesko said that the cost per page of digital color printing has dropped from 30 cents to about 10 cents and will soon drop to 5 cents. The cost of digital printing will soon be lower than traditional offset printing, instead of becoming the main printing method. He predicts that the market share of digital printing will increase from the current 22% to 39% in 2006.
Frank Romano, a professor at a printing school, said that the printing industry is fighting for market share by implementing new technologies, especially computer-to-plate (CTP) technology. He said: "CTP is a great savior of the printing industry, which has enabled the printing industry to achieve large-scale automation." However, he predicts that CTP will reach saturation in the few years before the industry. In the following years, the number of printing factories and the number of employees will continue to shrink.
TrendWatch Director Vincent Naselli pointed out some encouraging trends in the current printing industry. At the same time, he also warned that the recovery will be very slow and not everyone can benefit from it. He predicts that the number of purchases of various types of printing machinery will decline, and digital color printing will have a strong growth momentum as a result of solving reliability problems.
Naselli pointed out that the merger and customer demand will continue to affect the printing industry. At the same time, he cited print, prepress, and other professional surveys to assess current industry concerns and business priorities. In the survey, when asked about the foremost challenges, printers still ranked the overall economic environment as the top challenge and direct competition as the second challenge. Naselli said, “The competition from the non-printing industry is not the top 10 challenges. If you ignore the opportunities and impact on the business, it will greatly hinder business development.”
According to Andrew Paparozzi, vice president and chief economist of the National Printing Association, printing industry sales have continued to grow for the first time in two consecutive quarters in two years. If it is not affected by the war on terror, the printing industry will experience a growth rate of 4.7-5.2% in 2003 after it has experienced continuous decline in sales for two years.
However, Paparozzi said that the recovery is a slow and arduous process that will not be completed until 2004. He pointed out that the association’s growth forecast for 2003 was based on the previous forecast. "Compared to the entire economic situation, the recession has had a much deeper impact on us."
Paparozzi said: "Since 1998, the printing industry has not moved forward with the entire economy. This has nothing to do with the business cycle. This is a structural change and it is a profound change in the way we communicate." He pointed out that printers can make business decisions. Diversified development.
Areas that are expected to grow include digital printing, four-color or multi-color lithography, which also includes communication support services such as execution, mail order and database management.
He said that the biggest threat facing printing companies is that they forget the reality of their communications business. "Our main function is to fully understand the customer's unique communication needs, namely: print communication or electronic communication. We should also understand how to best meet the above-mentioned needs of our customers."
Harris DeWese, the industry's M&A expert and chairman and head of Compass Capital Partners, said that the entire printing industry's merger and acquisition activities have experienced a “rapid decline” after the peak of 1998-1999, and the company’s turnover in 2002 is expected to be less than US$500 million. Most transactions are sales.
He predicted that mergers and acquisitions will continue to decline in 2003, but between 2003 and 2004 there will be 3-5 "new buyers" and there may be several large deals involving famous entrepreneurs. Continuing mergers may focus on commercial printing, special printing and direct mail services.