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Output prices increase for first time since 2008

The BPIF’s latest Printing Outlook shows that it is the first time since 2008 and the financial crisis that average price movements have been positive for consecutive quarters.

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Brexit still tops the list of concerns for print business owners

However, respondents are not expecting this to continue into Q2 and the survey shows a slowdown in growth for the industry, with Brexit still topping the list of concerns for print business owners.

The report highlights that although growth slowed in the first quarter, the drop-off was not as extensive as expectations suggested it might be. The survey shows that 43% of printers increased output levels, 32% held a steady output whilst 25% experienced a decline.

Forecasts for Q2 suggest growth in the industry will be maintained but it will be at a further reduced level. Printers selected Brexit as their top concern, with 70% of respondents selecting it, up from 58% in the last quarter.

Competitor pricing was in second place with 50%, and paper and board prices continue to plague the industry with 47% of respondents selecting it as a business concern.

Charles Jarrold, BPIF’s chief executive, says: “We know, through our lobbying and representation activities, that the Bank of England’s Monetary Policy Committee are closely monitoring industry surveys for signs of wage inflation, input prices inflation and these feeding through to output price inflation – rather than been absorbed by companies and eroding their margins.

There are plenty of comments from survey respondents referring to suicidal pricing, material costs and of course turmoil and uncertainty related to Brexit

“As we are all too well aware, our industry has been experiencing climbing input prices and diminishing margins for some time – it is very interesting to see that, for the first time in 11 years, Printing Outlook is showing that there have been more increases than decreases in output prices over consecutive quarters. We will be sure to monitor this closely.”

BPIF economist Kyle Jardine adds: “There are plenty of comments from survey respondents referring to suicidal pricing, material costs and of course turmoil and uncertainty related to Brexit.

“However, a number of companies have noted that whilst some clients had been holding back on placing jobs (due to Brexit uncertainty), the floodgates opened slightly as the Brexit timeline was extended and clients were keen to get work ordered and invoiced before the March financial year-ends.

“No matter one’s viewpoint, there aren’t many adjectives left to describe the latest Brexit shenanigans.

“As fascinating as it has all been there’s no getting around the fact that, whilst most businesses do not appreciate the prolonged uncertainty from the Brexit deadline extension, many are thankful to avoid no-deal, for now.

“However, there is also a significant proportion of business owners that have had enough and just want it sorted (deal or no deal in many cases).”

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