The shock collapse of Curtis Fine Papers, which called in the administrators on Thursday last week, shows that no-one, whether a manufacturer, supplier or printer, is immune. A perfect storm of rising inflation and restricted access to capital eventually sunk Curtis, according to managing director Keith Chapman. I fear that this will be a familiar story in the coming months.

Last week, Hector Sants, chief executive of the Financial Services Authority, warned that the slowdown is entering its third stage in which the economic tornado that has ploughed its devastating path through both the money and stock markets, hits the real economy.

There has been a tendency in recent months to blame the media for the downturn. We have, some say, talked the country into recession. This head-in-the-sand attitude is dangerously misguided – the slowdown is very real and deeply routed in economic fundamentals.

Today we have the double whammy of a constriction of access to debt and rising raw material prices, resulting in significantly reduced capital for businesses to expand. In print, an industry where margins have already been squeezed, the problems the wider economy faces are exacerbated. How long the recession will last and how deep it will cut is unclear at this stage with predictions varying wildly but those who predict a slump on the scale of the Great Depression are wildly off the mark.

The real constriction on margins should only be short term. Market forces are already correcting the hugely over-inflated price of oil, which hit $146, which will bring some relief. With this in mind increased efficiency, and adding value are the order of the day – boosting margins is a much more effective survival plan than reducing headcount or cutting capacity and will leave printers in a better position to capitalise on the growth when the cycle starts again. 

William Mitting is news editor of PrintWeek.