No escape from industry downsizing: Hagop’s commentary

Business confidence may have improved but further industry consolidation is unavoidable according to the March 2010 quarter Printing Industry Trends Survey Report.

The report confirmed that industry projections from respondents three months ago were too optimistic in their thinking and that the worst is not yet over. Hagop Tchamkertenian, national manager for policy and government affairs at Printing Industries, expects contraction to continue.

“Sectors like sheetfed printing, which has too much capacity, is where the consolidation will occur, while the digital printing sector might actually grow in numbers,” he said.

“Overall, the numbers may not dramatically decline, but there is excess capacity there will be consolidation.”

Despite this, the outlook for general business expectations over the next six months remains favourable across all states, particularly in Western Australia, with a net balance of 46.2 per cent, followed by Queensland, with a net balance of 43.8 per cent.

Hagop also noted that material and wage costs remain a concern for an industry under ongoing margin pressure. “Given reported industry utilisation rates, the influence of idle capacity on industry pricing and margins remains an ongoing concern,” he said. “This is a critical issue for the printing industry, especially in the current environment of rising cost pressures.”