The fragile economy, ongoing concerns over inflation, and rising interest rates meant that orders and output did not rebound as anticipated.
Although 43% of printers were able to hold output steady, 27% experienced a decline.
30% increased output levels, leaving the survey with a balance of +3. Although this was an improvement on -3 in Q1, it was way below the previously optimistic forecast of +34 for Q2.
Expectations for Q3 have been dampened, with a balance of +5 forecast.
The trading trends survey was carried out from 30 June – 18 July. Responses were received from 107 companies employing 6,462 people, and with a combined turnover of just over £1bn.
BPIF economist Kyle Jardine commented: “Like orders and output, the view of the general state of trade was significantly lower looking back at Q2 now, than the forecast was for Q2 – and confidence remains fragile in Q3.
“As previously identified, a period of lingering and extreme cost pressures, combined with economic uncertainty, had eroded earlier recoveries in confidence. Whilst more positive news on inflation (and industry costs) appears to be forming, it has not yet been enough to stimulate any significant improvements in confidence.”
The survey found that competitor pricing levels had become the top business concern for printing company bosses. It was previously ranked two, behind energy costs.
The BPIF said that respondents had reported concerns that some competitors were pricing below cost.
The federation noted that while concerns over energy costs had fallen since the energy crisis hit last year, there were still many companies “that have been critically impacted by significant increases and uncertainty and unfortunate timing around energy contract renewals”.
BPIF CEO Charles Jarrold said that the industry continued to be an economic bellwether.
He said: “Against an uncertain economic backdrop, the cash flow analysis in the full report shows that much of the industry is in a reasonably strong financial position, 87% have either an excellent, good, or normal cash flow position.
“However, there is still a realisation that companies need to pay close attention to this; and devise and follow plans to improve their profitability. Controlling costs is key, the report highlights this and some other areas that companies are focusing on.”
Sales levels and wage pressures were the third and fourth ranking concerns, while access to labour was fifth.
More than 60% of respondents reported that they had conducted a pay review in Q2, and the resulting average (mean) change in basic pay was 5.4%.
The report is sponsored by Canon. Khalid Aziz, who joined the manufacturer in May as marketing director for Digital Printing & Solutions in the UK and Ireland, praised the federation for its work producing the information.
“The BPIF’s consistency with delivering key data and trends for the print industry each quarter is laudable and I’m excited that, through our partnership, the Printing Outlook Report is making a great impact by helping businesses make informed decisions.”
