This is how the printing industry has performed so far in 2019

Orders are expected to remain subdued in the third quarter but output is expected to bounce back.

The latest Printing Outlook survey from the BPIF (British Printing Industries Federation) showed 32 per cent of printers increased output levels in the second quarter of 2019.

The remaining respondents were split evenly with 34 per cent saying output was steady and 34 per cent experiencing a decline.

The resulting balance, the difference between the ups and the downs, was -2, a continuation of the decline experienced in the first quarter that followed a fourth quarter seasonal boost.

This fell short in comparison to the forecast for the second quarter, which suggested the balance would be +8.

A late Easter provided a boost in the first quarter but proved to be a drag on the second quarter.

However, the Brexit extension provided a late boost to the first quarter as clients were keen to get work ordered and invoiced before March financial year-ends.

The hangover to this was a contraction of output in the second, likely exacerbated by a perceived reduction in the necessity to stockpile and even a stimulated desire to run down some stocks, the report said.

Kyle Jardine, economist at the BPIF, said: “Input cost inflation has continued to add to the pressure companies are under in the second quarter – for the first time in three years paper and board has not been the main culprit.

“On this occasion labour, energy and ink costs all exerted more upward pressure.

“The second quarter of the year is the period which has traditionally been when many companies review wages, and it still remains a popular period for reviews and pay awards to be introduced.

“It is now also the period when National Minimum Wage and National Living Wage rate increases come into force – as a result more companies now conduct a pay review slightly earlier – in the first quarter, or early in the second quarter, with a view to activating any changes in the second quarter.

“Almost half, 48 per cent, of respondents reported that they had conducted a pay review in the second quarter.

“The target for many companies offering increases remains around two per cent.”

Looking ahead to the third quarter, printers are expecting to see their activity levels increase.

Output growth is forecast to increase for 42 per cent of companies, with 35 per cent of respondents predicting that they will be able to hold output levels steady in the third quarter, and 23 per cent expecting output levels to fall.

Brexit remains the biggest concern for the sector with 61 per cent of respondents selecting it as one of their top three business concerns.

Charles Jarrold, chief executive of the BPIF, said: “Printing Outlook makes it clear that printers are concerned about the effect Brexit, and the continuing pre-Brexit limbo, is having on their clients and general confidence.

“There are also concerns about currency weakness, administration burdens and stockpiling complications and costs related to building up stocks, running them down and then building them up again in advance or the next deadline.

“Not to mention sheer frustration with the length of time this pre-Brexit period is lasting.”