Global Print Industry Faces Economic and Environmental Challenges
- Published: April 03, 2020
The 7th drupa Global Trends Report will be published in April 2020. The results, from a survey conducted before the outbreak of the Coronavirus and the postponement of drupa to April 2021, show a global industry that remained positive but reflected more challenging global economic conditions. Packaging and functional market sectors are better placed than publishing and commercial. North America remains dynamic, while confidence tends to decline in Europe and all other regions. Developing regions are held back by concerns about political instability and corruption, while developed regions are nervous about an inevitable cyclical economic downturn. There is constant pressure on margins but increasingly the better-positioned companies counter this by continual innovation. Investment plans remain strong, as printers and suppliers all recognize the need to remain competitive.
These results come from the 7th major annual survey, which was answered by the drupa Expert Panel last November. The panel consists of drupa 2016 exhibitors and visitors with decision-making authority. The survey was conducted by Printfuture (UK) and Wissler & Partner (CH). Almost 600 printers and 200 suppliers participated, providing a representative picture of all regions.
Globally, 17 percent more printers described their company’s economic condition as “good” compared with those who described it as “bad”. The difference was even more pronounced among machinery manufacturers and suppliers, with +32 percent. However, a clear trend can also be seen: For example, after the slow recovery following the recession of 2007/2008, confidence peaked in 2017 and has been developing only cautiously since then. As always, the framework conditions of the individual markets and different regions vary greatly.
The packaging market is the most successful, followed by functional, commercial and publishing printing in the order mentioned [1]. In fact, a growing number of commercial and publishing printers are trying to diversify into the other two markets. The financial figures confirm this trend, with margins struggling in all market sectors. However, the active decline in sales is most evident in publishing.
Since the industry surveys began in 2013, North America has remained a dynamic market. In Europe, confidence rose until 2018, but has since declined, while all other regions have seen a decline. The success of machinery manufacturers/suppliers depends on the success of their customers, both regionally and market-specifically. However, in many cases they benefit from serving a broader range of markets and regions.
For several years, printers have responded to the constant pressure on margins by increasing turnover and keeping costs to a minimum. Sabine Geldermann, Director drupa and Global Head Print Technologies at Messe Düsseldorf, commented: “Increasingly we are seeing clear evidence that while cost reducing steps will continue, printers are recognizing the need to innovate – by launching new products and services in their existing markets or by entering new markets.” Investment plans therefore remain in place. In addition, more printers in all regions report that they will even increase their capital expenditure in the coming year instead of reducing it. This commitment to increasing investment applies to all markets, but is again most pronounced in packaging, followed by functional, commercial and publishing printing.
Most of the investments will be in finishing, followed by printing technology and prepress / workflow / print management. While the individual investment projects in the finishing segment are very diverse, more specific statements can be made in the area of printing technology: The most popular is toner-based color digital printing with single-sheet feeding. It is followed by sheetfed offset printing, although there are significant fluctuations between the markets.
Richard Gray, Operations Director at Printfuture, stated: “For the first time we asked specifically about the broader socio-economic pressures and there were two clear patterns reported across the globe. For the developed regions the focus was concern about the risk of, or reality of, economic recession in the country or region, followed by concern about global trade wars and the impact of global warming/environmental pressures. For the developing regions, it was corruption and political instability creating economic recession that dominated. Clearly, we must now add the impact of the Coronavirus, a concern for all which, however, is not yet represented by the report.”
The industry has weathered the last severe economic downturn and is expected to cope adequately with a global economic downturn, provided that it is not exacerbated by the effects of Coronavirus. The crucial, beneficial difference today is that the printing industry has adapted its business model to the challenges of digital communication in most markets. Investment is the key to staying one step ahead of economic developments.
Infographics and obtaining the full reports
The full report will be published in English at the end of April and can purchased online at www.drupa.com. The executive summary will be available free of charge in German, English, French, Portuguese, Spanish, Russian and Chinese.
For more information, visit www.drupa.com
[1] Commercial includes Direct Mail, Business Forms, Security, Wide-format, Trade Finishing for Commercial work, Transactional, Photoproducts
Publishing includes Newspapers, Magazines, Catalogues, Conventional book production, Short-run digital books, On-demand digital books, Trade Finishing for publications
Packaging includes Labels, Cartons & Carton Board, Flexible Packaging, Corrugated/Secondary, Rigid, Point of Sale/Point of Purchase/Banners
Functional (Industrial/Decorative/Textile) includes Printed electronics, 3D products, Ceramics, Textiles, Wall coverings/ Other Decorative Printing