BPIF releases Q4 Outlook report

The British Printing Industries Federation (BPIF) has reported in its latest Printing Outlook that growth in output and orders ramped in Q3.

The association says that the industry experienced a delayed recovery following a drop in output in Q2 which had been expected to come through earlier in the year. A similar pace of growth is now expected to continue into Q4 despite businesses being required to make adjustments following the government's recent Budget announcements.

The report looks at areas of the industry such as business concerns, emissions, capacity, profit distribution, price levels, and costs.

The association also says that while some uncertainty remains in the industry, Q4 expectations remain positive. Currently the concern that competitors are pricing below cost remains the top business concern among respondents.

The report also says that employment levels increased rather decreased in Q3 with intentions for Q4 also being positive despite concerns over skill shortages.

The BPIF says that industry competitiveness remains “ferocious”, which matches the concern over companies pricing below cost. Closely followed concerns are sales levels and access to labour as well as an increase in concerns regarding taxation, business rates, and red tape.

Commenting on the Printing Outlook Q4, Charles Jarrold, BPIF chief executive, says: “After a very challenging 2023, and a slow start to this year, overall, it’s encouraging to see this quarter’s responses which show confidence strengthening, although it’s also clear that business conditions are as challenging as ever – finding skilled people and dealing with intense competition stand out as key challenges.”

Jarrold adds: “While improved confidence usually bodes well for the future, the budget, which was made public just last week, is bound to have an impact on confidence too, with significant red tape and cost implications that are worrying businesses. Our message to government is that just when confidence has been rebounding, a new set of challenges are being introduced through the budget and other legislation, which carry the risk of setting us back.”

The latest report also details capacity utilisation which has improved but could still be better as constraints on capacity have been building.

A shortage of skilled workers continues to be a significant issue with calculations suggesting that capacity was restricted by just over 11% in October, which is up from 9% in July, 6% in April, and 4% in January.

Statistics show that companies are specifically targeting improvements in operational effectiveness, sales management, and cost control as a means to help maximise future profitability.

Kyle Jardine, BPIF economist, comments: “The printing industry now appears to have moved through the confidence doldrums as the improvement, that was forecast for Q2, came through strongly in Q3. Some uncertainty still remains but Q4 expectations remain positive. The last 24 months have been characterised by lingering and extreme cost pressures, economic uncertainty and political instability.

“Now, inflation has fallen below target, and the UK economy is experiencing moderate economic growth – though there has still been some uncertainty related to the change of government, and the wait for their first Budget. With the Budget revealed businesses will at least be ready to move on with some of that uncertainty behind; though they will likely find that process of moving on is more challenging as a result of changes made in the Budget.”

Key findings also report that labour costs remained the largest cost component with 32% share, on average, of total costs. Plans to increase profitability in the next 12 months including managing operations more effectively have a primary area of focus for the first time plus businesses feel they need to balance cost and pricing pressures.

Further information about the Printing Outlook Q4 can be found on the BPIF’s website.