Risky business rages: Hagop’s commentary

Business attitudes have plunged to the lowest level since December quarter 1990 according to the 2008 quarter Printing Industry Trends Survey Report.

Participant companies from all states and originating from 15 printing and associated sectors covering the printing industry value chain participated in the December 2008 quarter Printing Industry Trends Survey.

According to Hagop Tchamkertenian, Printing Industries national manager for policy and government affairs, activity levels in the printing and associated sectors failed to pick up during the December 2008 quarter due to economic downturn being experienced by the Australian economy.

The outlook for general business expectations over the next six months remains weak with respondents from all states forecasting deterioration. The most pessimistic state is Western Australia with a net balance of 54.6 per cent followed by Queensland with a net balance of 52.6 per cent.

Respondents from South Australia reported the highest utilisation rates with 83.3 per cent of respondents operating at capacity utilisation levels of 70 per cent or more, followed by respondents from Queensland (73.7 per cent), Western Australia (72.7 per cent), Victoria (63.6 per cent), Tasmania (60 per cent), and New South Wales (54.8per cent).

Noticeable industry developments during the December quarter included the worst net balance reported outcome for finance availability since March quarter 1990. Selling prices were reported to have fallen again despite rising cost pressures.

Reported material cost pressures during the December 2008 quarter were the highest in the history of the Printing Industry Trends Report which has been monitoring industry conditions since 1987.

Hagop said with industry participants now forecasting the continuation of difficult trading conditions during the March 2009 quarter, the first half of calendar year 2009 is likely to prove a challenging one for the industry.

“Industry sentiment has now plunged to an 18-year low and the only areas of expected improvement are selling prices and labour availability,” he said.

Hagop believes that the likelihood of a further interest rate cut combined with the latest Federal Government fiscal stimulus package may start to turn things around for the better.

“The stimulus packages announced in recent months are the equivalent to more than five per cent of Australia’s Gross Domestic Product. In terms of proportion of the economy that makes them the third largest after those for China and the United States,” he said.

“Hopefully they will start to have a positive impact on consumer sentiment.”