The fed’s latest Printing Outlook report for the UK’s printing and printed packaging industry found that steady, but subdued, growth continued for the sector in 2024.
The output, orders and confidence data reported for Q3 was the most positive for two years, and Q4 output and order growth continued “pretty much as forecast”.
But the BPIF said the responding comments to the survey suggested that the negative economic sentiment coming from government, the additional employment costs, and mounting regulations and administrative burdens on businesses were all weighing heavily on businesses.
Wage pressure has become the most serious business concern – replacing concerns that competitors are pricing below cost, demand is being held back, competition remains fierce, and some companies cannot currently afford to make the investments they seek, the BPIF added.
More positively, however, new technologies (such as AI) are being utilised, companies believe they can make improvements to workflow and increase automation, some are achieving healthy profits and growing, cashflow is holding up, and output prices have stabilised, as have paper and board costs.
Furthermore, exposure to bad debt and late payments has decelerated, and there has been slightly less pressure to accept “ridiculously extended payment terms”, the trade association said.
BPIF economist Kyle Jardine said: “There was a slow but steady improvement throughout much of last year – so it is disappointing to see confidence evaporate at the start of this year.
“Wage pressures have become the most critical business concern, and recruitment intentions have been curtailed.
“Thankfully other costs, excluding energy, have been more stable. Investment remains key, the focus for many companies in 2025 will be on improving workflow and adding automation wherever possible.”
BPIF CEO Charles Jarrold added: “Hopefully the dip in forecast for Q1 is only a short-term blip, and it can be turned around.
“Companies are currently looking to adjust and adapt to government decisions and searching for a way to invest so they can boost their productivity and increase profitability. If government can help stimulate business investment, then confidence could quickly turn positive once more.”
The survey also found that when it comes to company plans to increase profitability in the next 12 months, manging operations more effectively has held on to its top ranking in January, after surging up the priority ranking in October.
Almost one-quarter (23%) of respondents, meanwhile, reported that they were already using AI, up from 19% last year. Another 17% noted that they were currently researching the use of AI, and 27% said they were interested in exploring AI.
The survey was carried out from 3-21 January 2025 and received responses from 122 companies employing 8,028 people and with a combined turnover of £1.3bn.
