Its latest Printing for Profit Survey shows margins after finance charges as a percentage of sales fell below 4% for the first time since the reports inception in 1997. However ratios before financing charges show an improvement of 3.34% at 11.34%.

Director of coporate and external affairs Cicely Brown said finance costs were increasing at an alarming rate. The average company experienced a 9% increase in financing charges between 2001-2002, she said.

Other indicators in the survey point to a deteriorating use of operating assets, which could be compounding the problem.

BPIF chief executive Michael Johnson urged printers to make the most of tools at their disposal through the federation and Vision in Print to improve productivity and competitiveness.

The likelihood of a price rise is still remote, which increases the urgency of taking action to improve operational productivity and raise the level of skills within the sector, he said.

The annual Printing for Profit Survey calculates 17 productivity and profitability ratios and is broken down to show individual ratios for Scotland and nine different sectors of the industry including: books and periodicals; cartons and flexible packaging; stationery and business forms; and commercial printers.

Small general printers (sales of less than 1m) are the best performers in terms of profitability followed by cartons and flexible packaging.

Full reports are available to BPIF members at 250 and to non-members at 500.

Visit: www.britishprint.com