The forecast was for stronger growth to come through in Q2 but that expectation has been downgraded slightly and rolled over into Q3. The BPIF said the industry has now seen three consecutive quarters of growth, and the improvement is expected to accelerate in Q3.
Wage differentials connected to the hike in national minimum wage levels has continued to have a significant impact on companies in the latest survey, as most concluded their pay reviews in Q2. A difficulty in finding suitably skilled labour has also contributed to the wage pressure.
While labour cost increases continued to be the primary cost concern for companies, pressure continues to mount in other areas – in particular paper and board prices.
The report also found that companies pricing below cost, or the perception that some are doing so, has become the top ranked business concern.
When it comes to company plans to increase profitability in the next 12 months, cost control remains the primary area of focus, as it has since July 2023.
Researching new markets and putting efforts into driving sales are other key target areas for companies striving to improve their profitability.
BPIF chief executive Charles Jarrold said: “Whilst the recent growth status of our industry has been subdued, it reflects the period immediately prior to the announcement of the general election.
“While it’s very early days, there is a new level of energy and focus within government which I hope will feed through to economic confidence going forwards. We’ll be looking out for that in our next survey.
“Meanwhile, we do know that companies have come away from Drupa with clear intent to continue to invest, automate and innovate, and we will of course take every opportunity to discuss with the Labour government how to fully support that.”
He added: “As the leading industry trade association, we are closely engaged in identifying how we can support the sector as the new government announces its priorities, and as we have done previously with issues such as the increases to National Living Wage, gather information from the sector, and respond to calls for evidence and consultations as government designs legislation.
“That’s our opportunity to ensure legislation is business friendly and we’ll continue to engage fully and positively.”
The report also found that industry capacity utilisation remained concentrated in the 70-89% range in July, similar to what was reported in April.
Furthermore, as in Q1, a majority of printing companies were able to hold their margins steady in Q2 but margins remain under significant pressure, on balance, as costs continue to increase and the squeeze on output prices remains.
The survey was carried out during 1-17 June 2024 and received responses from 111 companies employing 7,515 people with a combined turnover of £1.2bn.
