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Fears over Brexit, late payments and paper prices

The latest Printing Outlook survey by the British Printing Industries Federation (BPIF), has revealed that despite 2018 finishing stronger than it started, the print industry has fears and uncertainties around Brexit, late payments and paper and board prices.

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The annual Printing Outlook survey by BPIF highlights how the printing industry is adapting to change in uncertain times

The survey shows 53% of printers increased output levels in the fourth quarter of 2018. A further 34% held output steady, whilst 13% experienced a decline in output.

According to the BPIF, numerous comments from survey respondents have referred to turmoil, uncertainty and unpredictability.

The top three fears and concerns of those in the print industry have been revealed as: competitors pricing below cost, the uncertainty of Brexit and rising paper and board prices, with access to skilled labour, energy costs and poor output price levels following.

The BPIF says that printers are continuing to report that they are under pressure to accept longer payment terms by some customers. 48% of respondents reported they had been obliged to accept longer payment terms from customers in 2018 to secure business. Of these, 64% were for terms up to 90 days.

printers are continuing to report that they are under pressure to accept longer payment terms by some customers

The lingering uncertainty surrounding Brexit has led to exasperation within a significant proportion of the UK printing industry, with maintaining a reliable and secure supply chain now coming through as the top concern regarding the impact of Brexit. 34% of respondents are currently stockpiling some supplies.

Commenting, Charles Jarrold, BPIF chief executive says: “The printing industry has become adept at dealing with change – it has had to in order to survive. However, it is a concern to see a surge in late payments and added pressure on printers to accept extended payment terms – which can only add increased pressure on cashflow and a higher risk of payment default.

“I urge all companies to keep a really close eye on outstanding debts and maintaining their cashflow.”

Despite fears and pragmatic expectations, confidence in the general state of trade in the printing industry took a positive step in the fourth quarter of 2018, turning around to reach positive territory for the first time since 2017.

Kyle Jardine, BPIF research manager

Access to finance has generally improved in the last 12 months, and the number of printing and packaging companies experiencing critical financial distress decreased in quarter four.

“Many respondent comments refer to sheer frustration that the uncertainty surrounding Brexit has still not been removed, a loss of faith in our politicians and concern over ‘no-deal’ becoming a reality by default,” adds Kyle Jardine, BPIF research manager.

“However, there were still numerous more positive comments expressing a desire to just get it done and that, after a period of adjustment, it will be better for UK businesses to leave the EU,” he concludes.

If you have any news, please email carys@linkpublishing.co.uk, or join in with the conversation on Twitter.

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