BPIF PRESS RELEASE, 1st August 2024
Output and order growth slow and steady in Q2 as confidence remained in the doldrums — expectations remain positive for a stronger pick-up in Q3.
The slow and steady improvement for output and order growth in the UK’s printing and printed packaging industry has continued in the second quarter of 2024. The forecast was for stronger growth to come through in Q2, but now that the BPIF has published its latest Printing Outlook report (for Q3 2024) that expectation has been downgraded slightly, and rolled over, into Q3. However, we have now had three consecutive quarters of growth, and the improvement is expected to accelerate in Q3.
Volume Of Output – Q2 Improvement Below Forecast, Q3 Expectation Is Positive
The output balance of +10 was below the forecast of +25 for Q2. A balance of +22 is forecast for Q3.
Wage pressures, linked to historically high inflation and the knock-on effect of maintaining wage differentials connected to the hike in national minimum wage levels has continued to have a significant impact on companies in the latest survey – as most concluded their pay reviews in Q2. A difficulty in finding suitably skilled labour has also contributed to the wage pressure.
Labour Costs – Wage Pressure Surged Further In Q2, Likely To Ease In Q3
A balance of +66 in Q2 was above the forecast of +56. A balance of +13 is projected for Q3.
Industry competitiveness is fierce – companies pricing below cost (or the perception that some are doing so) has become the top ranked business concern. However, controlling costs, researching new markets, and putting efforts into driving sales are all key target areas for companies that are striving to improve their profitability.
Plans To Increase Profitability – % Of Respondents Selecting
The BPIF Printing Outlook Q3 2024 report features sections on industry turnover, business concerns, costs, pay reviews, paper and board, and much more.
Kyle Jardine, BPIF Economist, said:
“It might be hard for some companies to identify with the slow and steady sentiment – it is important to acknowledge that some companies have reported a quiet spring and summer; whilst others have rarely been so busy. The aggregated data represents the path the industry is taking – and that is one of improved, but still slightly subdued growth, but waiting expectantly for a stronger pick-up to come.
“The economic backdrop has continued to improve – growth is positive, inflation has come down and we are waiting to see when interest rates will also track down. If the UK economy continues to improve – and the new Government can find a stable way to support business, then confidence will return more strongly.”
Charles Jarrold, BPIF Chief Executive, said:
“Whilst the recent growth status of our industry has been subdued, it reflects the period immediately prior to the announcement of the General Election. While it’s very early days, there is a new level of energy and focus within Government which I hope will feed through to economic confidence going forwards. We’ll be looking out for that in our next survey. Meanwhile, we do know that companies have come away from drupa with clear intent to continue to invest, automate and innovate, and we will of course take every opportunity to discuss with the Labour Government how to fully support that.
“As the leading industry trade association, we are closely engaged in identifying how we can support the sector as the new Government announces its priorities, and as we have done previously with issues such as the increases to National Living Wage, gather information from the sector, and respond to calls for evidence and consultations as government designs legislation. That’s our opportunity to ensure legislation is business friendly and we’ll continue to engage fully and positively”
Featured In Printing Outlook This quarter:
- Output and orders – last quarter and forecast for this quarter.
- Business confidence, concerns, and uncertainty levels.
- Turnover – annual and monthly turnover analysis and forecasts.
- Capacity – utilisation and constraints.
- Costs – paper & board, ink, labour, energy, and average cost structure.
- Trend data on employment, prices, costs, margins, profits, cash flow and productivity.
- Profitability benchmarks and plans for improvement.
- Pay Reviews – activity and average % changes.
- International trade – export orders and price trends.
- Consumables – paper consumption and printing ink data.
- Energy – sector update and comment.
For further information on Printing Outlook go to www.britishprint.com/printingoutlook
For any queries on this release please contact [email protected]
ENDS
