Semper International, the leading placement firm for skilled help for printing, pre-media, and marketing firms, reported this week that print industry profits declined for the second straight quarter with just 70 percent of all responding companies recording a profitable 4th quarter to end 2015. Coupled with a 33 percent decline in the percentage of companies reporting increased sales during the most current two weeks, it appears that recent pessimistic forecasts increased in the final quarter of 2015. Despite these ill tidings, sales projections for the upcoming quarter are, in fact up, with more than 50 percent of reporting companies anticipating growth.
Since February 2003, Semper International has provided a quarterly survey offering estimates of trends in the printing and graphics industries. To prevent bias, survey questions — both qualitative and quantitative — are designed by Semper corporate partner Cvent. Survey participants include more than 300 small, medium and large printing companies; both clients and prospects of Semper International. Participants provide data on revenue and hiring as well as estimated outlooks on future trends. Data is requested from a random sample and are not screened. To preserve confidentiality, individual company information is not part of the tabulation.
For the past year, Semper International has partnered with Printing Impressions to distribute the survey. This partnership has generated a boost in participation, particularly among large companies (measured by number of employees).
“This survey continued to see a marked deterioration in positives. In fact, of the many data points we gathered, we only found one rising result,” explains David Regan, Semper International CEO, and the Survey Report’s author, “It appears our industry is not immune from this downward trend with profits reducing, lay-offs planned, and a slow start to sales in the New Year. Despite the pressures, a majority in the industry are forecasting an increase in sales for the first quarter of 2016, and capital investment and diversification efforts are still ongoing.”
The report offers a number of significant insights that Semper saw in the survey data, including:
- Industry sales have slowed, with only 28 percent of firms experiencing increased recent sales, compared to 28 percent during the previous quarter.
- The cost of labor has simultaneously increased, with a doubling of firms reporting base pay increases this quarter, up to 45 percent.
- Net revenues declined significantly, with 60 percent of reporting companies indicating margins below 5%, a dramatic change from just 25 percent of firms netting anemic income last quarter.
- More than one in three companies reported the economy as their largest competitive threat this quarter, up from 28 percent in the third quarter.
- For the second quarter in a row, maintaining profitability and keeping staff productive is the ‘Number One’ concern facing respondents to this question.
- With that in mind, companies indicating they expect to hire new staff this quarter dropped to 30%, while those planning to eliminate positions rose to 9 percent.
- The single bright spot in the fourth quarter data came in the form of sales projections. The percentage of companies expecting sales to grow in the first quarter of 2016 grew from 48 percent to 53 percent.
