The BPIF’s latest Printing Outlook, a quarterly published study of the health of the industry, found that a majority of companies increased their output and order performance, and many expect to see further improvements in Q1.

The Q4 improvement came despite the December introduction of the government’s Plan B measures, which were introduced in an attempt to dampen the spread of the Omicron Covid variant.

The survey found that 63% of printers managed to increase their output levels in the fourth quarter of 2021. A further 19% were able to hold their output steady, while the remaining 18% suffered a decline in output.

The implementation of Plan B, despite coming late in the quarter, did still have a considerable limiting effect for companies that work with clients in the events and hospitality sectors.

Activity levels are expected to remain positive in Q1, but not quite as strong, with output growth forecast to increase for 51% of companies, with a further 32% predicting that they will be able to hold their output levels steady. The remaining 17% are expecting their output levels to decline.

This Q1 forecast is historically high for the time of year, although much of the industry is still working towards full recovery in the face of some severe disruptions. The BPIF said the industry will be hoping that the easing of restrictions once more will encourage further recovery and help stimulate growth in the most disrupted sectors.

BPIF chief executive Charles Jarrold told Printweek: “We definitely had a seasonal boost in Q4, and November was the strongest month since the start of Covid, so that's encouraging. But activity did still remain below pre-Covid activity levels by about 5%. But overall it's positive, and another big step on the road to recovery despite Plan B, which obviously threw a bit of a spanner in the works.

“And there had been a sense of optimism about Q1 of this year, but clearly there are intense cost pressures on energy and substrates, and the substrate issue is particularly acute at the moment, both around price and availability, which is causing disruption and is going to knock things a little bit.”

Substrate costs was the top ranked business concern for printing companies for the third successive quarter, as selected by 78% of respondents. Energy costs were the second ranked concern, chosen by 58% of companies, and competitors pricing below cost was the third ranked concern, as selected by 43% of respondents.

Access to skilled labour was just a little behind, with 41% of respondents selecting it, while dealing with the economic impact of Covid-19 has resurfaced as a concern, with 29%.

The survey also found that a supply shortage of raw materials remains the most challenging issue affecting companies’ ability to recover from the impact of Covid-19.

Industry capacity utilisation was not quite as strong in January as it was in October, with a period of Plan B restrictions and supply shortages being limiting factors. However, while 51% of companies were operating at less than 50% capacity in May 2020, this decreased to 8% in January 2021 and 3% this January.

74% of companies were operating at capacity levels above 70%, down from 81% in October but still greater than the three quarters prior to that.

The survey also found that the vast majority (96%) of respondents do not expect to make any redundancies before the end of March, and employment levels have continued to increase, on balance, in Q4 as more companies than in Q3 recruited new staff.

Also, in 2022 more companies are looking at targeting investment to help them adjust to the new growth opportunities and ride cost exposures. The top three investment targets are workflow and automation, bindery and finishing, and MIS.

“Confidence is coming back post-Covid, we are clearly moving into a beyond or living with Covid world and I think there is a recognition that people are going to need to get on with their lives, and this means that lack of demand has gone away as an issue at the moment,” said Jarrold.

“And where people were pausing investment, I think they now want to get on and do that. The labour market is also quite tight – we have seen strong uptake of apprenticeships, so businesses are responding – but the reality is that investment is part of that story and organisations are needing to look at what they can do to improve their productivity. Government incentives help a bit as well, around super-deductions for example.”​​

Canon is the new sponsor of the Printing Outlook report and, starting with this issue, respondents will now get their own printed version of the full report, which will be produced by the manufacturer using its imagePress C10010VP technology.

The Q4 Printing Outlook survey was carried out during 6-23 January 2022 and received responses from 98 companies employing 6,780 people and with a combined turnover of £1bn.