Climbing costs, pressure on prices and a squeeze on margins shattered optimism, said the BPIF in its Directions quarterly trend survey.

Almost two-fifths of firms said order books were worse than normal for the time of year and a third saw trade worsen. The balance of respondents expecting spring trade to be better than a year ago was only 3%.

"It looks pretty bleak," said Kyle Jardine, BPIF information services manager. "There will be firms that go bust.

"The downward trend is not just about closures but consolidations, mergers and takeovers. Numbers of firms going bust are likely to go up in the coming quarter."

Economic consultant David Ross said: "Printers are stuck between a rock and hard place: the former is the difficulty of raising prices to customers and the hard place is the soaring cost of energy you can't pass on."

Some firms tried to raise turnover by beefing up sales forces, he said. Others cut costs by shedding jobs. Some improved technology or used "improvement programmes" such as industry forum Vision in Print.

"Smaller printers can get together formally through acquisitions or informally by buying circles. If merger laws were easier more firms may look at this route. But personality egos can make merging a tough option," added Ross.

Andrew Brown (pictured), BPIF corporate affairs director, said: "Now more than ever is the time to focus on controlling costs and getting more performance from your assets and people.

"Developing services that add value to customers and investing in skills should be key priorities."


Survey Findings

- 38% said orders were worse than normal for the time of year

- 33% reported a worsening in the general state of trade

- 3% expected spring- quarter trade to be better than a year ago

- The 100 firms surveyed represent a 10th of the industry in turnover and staff