NAPL’s State of the Industry Report Candidly Reports on Tough Issues

Written by Howard Fenton
Senior Technology Consultant
NAPL
In the most recent NAPL NewsTalk Live presentation, Andy Paparozzi, NAPL’s Chief Economist, previewed some of the key findings of the upcoming NAPL State of the Industry report. Andy reported good news and bad news. The good news is that sales are not declining overall—they are stable. The bad news is that manufacturing costs are rising, pressure remains on pricing increases resulting in a classic profit crunch. Also discussed was what the leaders in the industry are doing to counter this problem.
In terms of declining sales, Andy reported that “Our total sales fell 0.4% last quarter. That follows a decline of 1.6% during the previous three months and a gain of 0.6% during the same period one year earlier. From mid-2007 through early-2010, our sales fell nearly 25%, unlike anything we’d ever seen.”
But perhaps a larger problem is profitability. “Over 84% of State of the Industry participants tell us that rising costs are a problem,” said Andy. He then went on to say, “Which costs?  Health care ranks first, by far, followed by paper, wages/salaries, and energy. The problem is costs are rising in markets that are still very resistant to price increases, creating a classic profit squeeze.”
“The only good news is that sales have stabilized for short periods of time but the upturns in activity have been short-lived which is troubling,” said Paparozzi . During a healthy recovery, modest gains would build into more substantial gains. It wouldn’t be a straight line up—no recovery ever is—but in general, growth would be accelerating. That’s not what’s happening: Modest gains have been followed by offsetting losses rather than the more substantial gains that create self-sustaining recovery. That leaves us back where we started, with sales totaling $76.3 billion last quarter, up little more than a rounding error from $76.1 billion two years ago.
The call to action for commercial and in-plant printers is to measure, streamline, automate, increase productivity and reduce costs.  The hard and cruel fact is either you are adapting and improving or you’re falling further behind.  The NAPL State of the Industry report will be shipped to NAPL members in late July and will be available for purchase on the NAPL site.
What are you doing to measure, streamline, automate, increase productivity and reduce costs?
To learn more about the latest State of the Industry report, the recording is available on the NAPL site.
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Howard Fenton is a Senior Consultant at NAPL. Howie advises commercial printers and in-plants on: benchmarking performance against industry leaders, increasing productivity through workflow management, adding and integrating new digital services, and adding value through customer research. He’s a paid contributor to this blog.