Pricing pressure puts strain on New Zealand printers

Price increases and bad debts make the road to recovery a slow journey for the New Zealand printing industry.

According to results from 17 participants in PrintNZ’s Print Industry Barometer for the second quarter of 2010, little has changed since the first quarter. Sales have improved marginally over the first quarter, profitability is down, staff numbers are static and debt collection has slightly improved.

A major concern to most respondents was pricing policies. One listed “ridiculous quoting by competitors” as an issue. Another wrote: “We are passing on the recent paper price increases, but this is not being done by all our competitors. Why not?”

PrintNZ’s chief executive, Joan Grace (pictured), told Print21 that relief is still far off.

"The recession is not over yet and the longer term implications of poor performance of the economy will be felt in our industry for some time. On-going concerns about margins and debt collection are highlighted again in this result and mirrored in meetings with our members," she said.

"There were poorer results reported from the regions in this quarter. Past results have tended to see regional printers somewhat insulated from the worst of the recession with the agriculture and tourism sectors of the economy holding up. The insulation seems to be ‘thinner’ now."

Though there has been a slight improvement with cash flow and bad debts, printers are still concerned about the impact that these factors could have on their businesses. “We have got a few potentially nasty bad debts with customers who we thought were sound,” one answered.

“People holding back payments has increased dramatically and stepping up procedures and effort has had minimal positive results,” wrote on company.

One respondent was particularly grim in their projection of what lies ahead: “We do not see any major improvement in the foreseeable future.”

This sentiment was not found in all participants, however. “We are seeing a recovery, but it is more muted than we or the analysts originally expected,” said one respondent. Another said: “We have been a little busier due to jobs that were delayed last year now going ahead.”