Forecasts from the previous report predicted a positive output balance of +15 (the difference between those businesses that increased output levels and those that saw a decrease), while the results in fact showed that 50% of printers increased output levels, with 20% reporting a decline – leading to a balance of +30, double the BPIF’s expectations.
Despite this, a subdued forecast was put forward for Q4, with just 44% of printers expecting to increase output in the usually busy pre-Christmas period. The forecasted balance was a diluted +14 as 30% of printers believed their output would fall between October and December, which, if realised, would be the weakest Q4 for five years.
“Going back to before the financial crash there certainly was a consistent holiday boost in Q4,” said BPIF research manager Kyle Jardine.
“This has not been the case as much since the crash, though we did see signs of re-emergence in the past couple of years.
“However, the confidence is not there with printers yet to lead to a positive forecast – I recall speaking to a lot of people we surveyed who would say they had a couple of incredibly busy weeks followed by slow weeks. Trade is fluctuating and uneven. That uncertainty is not breeding confidence in printers.”
Hanging over the survey was the industry’s ever-increasing Brexit concerns. Gauging companies’ confidence with its Brexit Barometer, the BPIF found half of respondents to be “somewhat unconfident” about leaving the EU, while 5% are now “very unconfident”. This leaves a balance of -41, descending from -28 and +4 in the previous two quarters.
Jardine said: “What we are finding is that companies are quite confident in their own outlook and operations, they are feeling positive about their work and their position in the market. But that does not extend outward to the wider industry.
“Companies were initially split between bigger companies who wanted to stay in and smaller companies who were quite happy to leave. That goodwill is shrinking as the government’s negotiations with Brussels continue and uncertainty keeps growing.”
Key to growing Brexit negativity may be the changes to exchange rates, which can lead to struggles to invest in equipment and services coming from EU countries, according to Jardine. He also discussed the possibility of reduced access to skilled labour if EU nationals stop electing to come to the UK or those residing here choose to leave altogether.
Measuring the top business concerns this quarter, competitor's pricing below cost continued to be the biggest worry, with 65% of companies listing it, while rising paper and board prices stayed second with 47% - rising from 42% last quarter and 32% previously. PrintWeek reported last month on fresh paper price rises in the quarter.
The BPIF conducted the survey in the first two weeks of October, receiving responses from 116 companies that employ a total of 8,204 staff and have a combined turnover of just more than £1bn.
