Print prices plummet for the sixth year running
Industry optimism declines as key economic indicators are once again below expected outcomes.
Printing Industries national policy and research manager, Hagop Tchamkertenian said the decline in business confidence is the first sign that the industry may be suffering election jitters.
"With the federal election now just over four weeks away and uncertainty surrounding the outcome of the election, the printing and associated industries are reporting declining business confidence about future business prospects" he said
"It remains to be seen whether business confidence will bounce back after the election."
The September 2007 quarter report of the Printing Industry Trends Survey showed a number of developments such as:
* Increased orders and production
* Increased sales and net profits;
* Increased employment and overtime levels;
* Increased investment in plant and machinery during the past six months;
* Finance reported more easier to obtain;
* Labour availability was reported to have deteriorated once again for the 13th consecutive quarter;
* Increases reported across all production cost categories;
* Selling prices reported to have fallen for the 27th consecutive quarter;
* Reduced levels of raw material stocks; and
* Increased numbers of outstanding debtors.
The September 2007 quarter report shows high capacity utilisation/activity rates were achieved by the Cheques and Securities, Labels, Desktop Publishing and Graphic Design and General Promotional and Commercial sectors.
Considerable levels of excess capacity seem to exist in the Book Binding, Books, Magazines, Periodicals and Newspapers, Business Forms and Continuous Stationery, Graphic Reproduction, Screen Printing and Folding Cartons sectors.
Most product sectors are expecting improvements to take place in general business conditions during the December 2007 and March 2008 quarters.
Most sectors are either forecasting increased investment or no change in plant and machinery over the next six months, while the graphic reproduction and greeting cards, calendars and diaries sectors are forecasting reduced investments.
A close examination of the latest survey outcomes clearly shows some interesting developments. A number of trends have become entrenched such as skilled labour availability continuing to remain a problem for companies operating in the printing industry and industry expectations point to the continuation of the problem. Selling prices continue to fall as well despite expectations to the contrary.
Material costs seem to be moderating on the back of a much stronger currency with the net balance outcome reported during the September 2007 quarter being significantly lower than the corresponding outcome 12 months ago.
Raw material stocks were also reported to have declined for the second consecutive quarter. Average wage outcomes continue to be significant and the September quarter saw a much higher net balance outcome.
The December 2007 quarter is expected to yield the following results:
* Net balance increases in orders, production, sales and net profits;
* Recovery in selling prices;
* Reduced availability of finance;
* Reduced availability of labour;
* Increased employment and overtime levels;
* Further increases in all production cost categories - average wages, other
labour costs, and average material costs;
* Increased stock levels; and
* Increased number of outstanding debtors.
Over the next six months (December 2007 quarter and March 2008 quarter) the survey respondents are forecasting:
* Increased investment activity in plant and machinery; and
* Increased investment activity in buildings.