Benchmarking shock identifies lower 25% of the industry as earning less than $30,000 per year, including wages. Watershed national Transition Tour lays bare the stark reality facing commercial printers as the industry transforms. The average profit available to the owner in the bottom quartile is $33,824 which equates to $16.66 per hour.
Half way through the six-city Future Print initiative, printers who came along in Sydney, Melbourne and Hobart were gobsmacked by the figures revealed through the national benchmarking programme. According to Bill Healey, former CEO of Printing Industries and architect of the Government-funded Future Print who introduces the presentation, the response of the audience to the figures was electric.
Industry analyst, Richard Rasmussen, who presents much of the information makes no bones about pointing out that the figures for the year 2014 reveal many printing company owners are working for wages below the poverty line. While the top 25% of printers are making good money above $500,000 per year, the median reward for printers, especially A3 producers, is around $70,000 including wages. $458,397 is the average of the top quartile’s profit (profit available Before Owner’s Salary). Median for A3 producers is likely to be about $70,000 before owner’s salary.
Describing the results as “worse than I imagined,” Rasmussen considers many industry participants to be in crisis. He fears some are in the position of tipping their superannuation into keeping businesses afloat, without having a real plan to transition to a better business model or to get out of the industry.
The Transition Tour focuses on giving printers a snapshot of how the commercial printing industry is actually going. It delivers participants the results of the first national Benchmarking Survey. This Future Print programme attracted almost 100 printing companies to enter their data into the confidential survey. “ This is a pretty good cross section statistically,” said Rasmussen. “But it doesn’t paint a pretty picture.” It shows that many printers are caught between falling revenue and increasing debt without a clear pathway to the future.
Rasmussen then presents the data from his unique four-year-old Market Watch Survey. This tracks the buying and selling of printing businesses based on such information as trade magazine reports and business broker results. Among some very telling statistics he reveals that on average 200 printing companies per year disappear in either mergers or closure. Quoting Bill Healey, he estimates the current size of the industry to be 3500 commercial printers in Australia.
Participants are then given a breakdown on the number and types of printing equipment going into the industry in order for printers to understand the dynamics of the marketplace. Rasmussen estimates there are approximately 1000 mid-range volume digital presses being installed every year, as compared to less than 50 offset machines. With an estimated 1500 offset printers in operation throughout Australia, it shows how few of them are renewing their equipment.
Installations of wide format presses show all the signs of a boom. Sales have risen from an average of 18 per year four years ago to last year’s estimated 54 machines. Rasmussen thinks this grossly under-reported, but trend is clear.
The final part of the presentation concentrates on the need and the types of Transition plans open to printers. These include how to evaluate the best option whether to change the business model, outsource work, merge or sell or even exit the industry.
“The important thing is for business owners to have a plan. Without a plan they are flying blind and will get into trouble,” said Rasmussen.
He encourages printers to come along to the Transition Tour presentations in Adelaide (11 Nov), Perth (12 Nov) and Brisbane (18 Nov) as well as take part in this year’s Benchmarking Survey.
“What it shows, is that sections of the industry are in crisis and that, whatever else is happening, it’s not business as usual,” he said.