Using latest figures from IMF, Eurograph and ZenithOptimedia the report shows demand for coated, wood-containing paper used in books and newsprint fell by 8% in Q1 of 2012 compared with the same period last year. Total European demand for magazine paper also declined by 4%.

Magazine SC paper was the only product to experience a rise in demand, increasing by 3%, while Western Europe deliveries showed a slight increase of 1%.

Book paper and newsprint reported an increase in exports, particularly among newsprint delivered to Asia, which rose by 47% compared to Q1 2011.

ZenithOptimedia forcasted advertising investments in printed magazines and newspapers to continue to fall by 1% per year until 2014.

Advertising investment has not necessarily declined overall, the report states, but has moved towards the digital platforms of publishing houses, reducing paper demand amongst newspapers and magazines which are gaining a larger presence online.

The report suggests that the current state of the European economy is a further factor in the declining demand for newsprint with parts of the world reporting a decrease for Q1 of 2012 except Asia, where demand in China rose 14% and Latin America.

Advertising investments in Latin America will continue to grow by 9.2%, the report shows, while Western Europe will experience a mere 1.5% increase in demand, compared to 6.5% even in Eastern Europe.

The gloomy figures follow a difficult quarter for paper companies, during which UPM closed its newly acquired Myllykoski capacity at its Albbruck paper mill in January, and Norske Skog shut down its Follum mill in Norway following years of cutbacks. Stora Enso has also consolidated its newsprint, book, magazine and fine paper capacities, combining them under a new printing and reading department.

According to the report, the outlook for direct mail and product catalogues is less threatening, as no reduction in demand has been predicted across these marketing channels. Demand for telephone directory paper remained stable compared to the same quarter last year, but it dropped 5% in 2011 and continues to decline steadily at a rate of 20% year-on-year.