The quarterly study of the health of the industry found that 43% of printers increased their output levels in the first quarter of 2019 while 32% held output steady and 25% experienced a decline in output.
The BPIF said the fact that Easter came late this year, and therefore fell outside the Q1 survey period, will have boosted performance in the period, but will be likely to drag performance down in Q2.
Going into Q2, fewer respondents said they are expecting to see their activity levels increase. However, output growth is forecast to increase for 33% of printers, 42% predict they will be able to hold output levels steady and 25% expect their output levels to fall.
Brexit was respondents’ most voiced business concern, with 70% selecting it as one of their top three concerns, up from 58% in Q1.
Maintaining a reliable and secure supply chain was the top Brexit concern, as selected by 77% of respondents, followed by general cost inflation (52%) and non-tariff barriers (42%).
“There is concern as to what’s going to happen next, with more turmoil potentially ahead. I think the longer this goes on, the more that investment will be hit generally,” said BPIF economist Kyle Jardine.
“Companies have been delaying decisions since the referendum, and more so recently, and when you think there is a bit more certainty coming back, it’s changed again.”
Competitor pricing was selected by 50% of respondents, down from 60% in the last quarter, while 47% of respondents selected paper and board prices, making it the third highest ranked concern.
Access to skilled labour, late payment and poor output prices were all further back in the ranking.
Average prices remained in positive territory in Q1, marking the first time since the 2008 financial crisis that average price movements have been positive for consecutive quarters. 19% said they were able to increase prices in Q1 while 65% were able to hold them steady.
“This could be the start of a turnaround but it is perhaps more likely that it is connected to trade wars at the end of the year after a period of such long cost inflation,” said Jardine.
“I think the picture in Q1 would have been slightly muddled by the way some [printers] maybe had a slow period at the start and then picked up a bit in March, as a result of some companies having to rush orders to get them in before the financial year-end.
“The fact that people were reasonably busy meant that maybe there was possibility for a bit of movement on price.”
Elsewhere, the study found that 51% of respondents are currently stockpiling some supplies, up from 34% in the previous quarter.
And while the number of printing and packaging companies experiencing both ‘critical’ and ‘significant’ financial distress decreased in Q1, Jardine said the number of companies in the ‘significant’ distress bracket “is still relatively high”.
The BPIF Outlook survey was carried out during 1-18 April 2019 and polled 131 companies employing 9,894 people with a combined turnover of almost £1.4bn.
