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Idealliance State of the Industry Survey Finds Sales and Pricing Power Continuing to Rise

May 16, 2018

Chief Economist Andrew Paparozzi sees current economic performance supporting projected 2%-3%+ growth in industry sales this year.

The upturn is continuing for the commercial printing industry, with sales, pricing power, and confidence all rising gradually in the first quarter of 2018, reports Idealliance Chief Economist Andrew Paparozzi in the Spring 2018 issue of the State of the Industry Update newsletter. The annual State of the Industry Reportand periodic State of the Industry Updates are sponsored by Canon and distributed exclusively to members of Idealliance, a global thought leader in the graphic communications industry and a non-profit organization with 11 strategically located offices around the world.

“Preliminary data show total commercial printing industry sales from all sources grew 1.6% during the first quarter of 2018,” says Paparozzi. “That follows gains of 1.9% during the second half of 2017, 1.2% for the first half of last year, and 1.5% for all of 2017. And, although total sales of $85.2 billion are still 13.3% below pre-Great Recession levels, they are up 10.7%, or $8.2 billion, from their 2011 low.”

He points out that the industry growth is not surprising given the economy’s recent performance, with the annualized growth rate of the GDP, consumer spending, and business investment all at least doubling between the first and fourth quarters of 2017. “Solid economic fundamentals suggest this cycle has a long way to run, so we’re sticking with our forecast that a robust economy will help our industry’s sales grow 2.0%–3.0%+ per year over the next three years,” says Paparozzi. But, he cautions, “Gains due to a favorable swing in the business cycle are short-lived unless we are delivering the value that keeps clients in and the competition out.”

“Survey-based data and knowledgeable insights from the Idealliance Institute for Strategic Research, such as those provided in the State of the Industry Report and Updates, serve as critical strategic planning resources for business leaders in our industry,” says Idealliance President and Chief Executive Officer David Steinhardt. “These reports and our upcoming Institute studies on the mailing industry and media buying trends will help every industry company make more informed investment and staffing decisions going forward.”

Paparozzi noted that nearly half (48.6%) of those responding to the latest Idealliance State of the Industry Survey said they expect first quarter 2018 sales to exceed those of the same period last year, and more than half (58.1%) of those expecting growth gave at least partial credit to improved business conditions, with two-thirds—67.4%—expecting overall business conditions to be better in 2018 than in 2017.

But, notes Paparozzi, “Few are counting entirely on a macro upswing, with more than four out of five—83.8%—crediting actions they’ve taken to capture more work from current clients, add new clients, win work from competitors, increase client retention, and so on, in full or in part for their gains.”

Pricing also appears to be moving upward, with 51.4% of survey respondents saying their prices are higher, on average, than a year ago, while a scant 2.8% said they were lower. The average change in prices reported was 1.7%, more than double the 0.8% price increases in all of 2017.

Paparozzi will discuss these and other findings in a free Idealliance State of the Industry webinar, “Nine Steps to Creating a Sustainable Competitive Advantage,” 2:30 p.m.-3:30 p.m. (ET) on Wednesday, May 23. Go to https://tinyurl.com/y8jc2szc for more information or to register.

The Idealliance Institute for Strategic Research, under the direction of Chief Economist Andrew Paparozzi, provides timely, accurate analysis of the graphic communications industry’s performance and prospects. Reports issued by the Institute include the Idealliance State of the Industry Series, Capital Investment Reports, and Mailing Industry Report.

Regular surveys of the industry are an important part of the Institute’s research. To maximize the validity of its surveys, it builds panels of participants and long-term relationships with members of those panels to encourage in-depth, candid discussion of business and industry issues. Idealliance researchers employ the most effective statistical sampling and modeling methodologies to ensure the validity of their results.

For more information about Idealliance Institute of Strategic Research studies and trends reports, contact Andrew Paparozzi at (703) 837-1062 or apaparozzi@idealliance.org.

For information on membership in Idealliance and exclusive member benefits such as the State of the Industry Report and Updates, visit www.idealliance.org or contact Idealliance Customer & Services Manager Donna Komlo at (703) 837-1060 or dkomlo@idealliance.org.

ABOUT IDEALLIANCE

Idealliance, a global thought leader in the graphic communications industry since 1896, is a non-profit industry organization with 11 strategically located offices around the world. Idealliance serves brands; content and media creators; manufacturers; service providers in mail, marketing, print and packaging; and material suppliers and technology partners worldwide. We do our work through Standards Innovation, Print and Digital Workflows & Technologies Collaboration, Research & Industry Insights, and Certification & Training. Our specifications have transformed the graphic communications industry by defining production workflows for color (GRACoL®, SWOP®, XCMYK™, G7®, BrandQ™), content management (PRISM®), mail supply (Mail.dat®, Mail.XML™), and paper (papiNet®). ISO recognizes Idealliance as the world’s foremost certifying body for competencies, systems, materials and facilities required to function as a state-of-the-art operation in a dynamic and highly competitive graphic communications marketplace. Join us in the transformation of our industry. www.idealliance.org

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