This week, Semper International, the nation’s largest supplier of skilled talent in the printing, pre-media and marketing industries, released their Third Quarter Economic Insight Report, which found a stark slowdown in overall industry profits and sales forecasts.
The economy returned to the forefront of industry threats in this survey, with 32% of companies indicating this was their main concern. This data finds many firms beginning to drop into survival mode, with hiring forecasts down and diversification rates declining 12% over the course of the quarter. While firms have not yet reported these economic pressures have crossed the line into staff reduction mode, this survey finds companies continue to struggling with the same profitability pressures we have seen since the third quarter of 2015.
Since February 2003, Semper International has provided a quarterly survey offering estimates of trends in the printing and graphics industries. Survey participants include a cross section of large, mid-size and small commercial printers, advertising agencies and media companies; both clients and prospects of Semper International. Participants provide data on revenue and hiring as well as estimated outlooks on future trends. Data is requested from a random sample and are not screened. To preserve confidentiality, individual company information is not part of the tabulation.
According to Semper CEO and report author David Regan, “For this quarter’s report, economic fortunes have turned a bit. The data we see from respondents today is significantly different than what we experienced last quarter, and for the most part reflects a fundamental slowing in the economy.” He assesses, “Based on these indicators, we feel that we are (once again) at an inflection point where companies are straining to protect staffing levels and profitability, but that the clock is running. If we don’t see an increase in aggregate demand soon, we may see some cutbacks as companies are forced to tighten their belts.”
Additional indicators the Semper Report revealed include:
• 70% of companies logged profits in this cycle, down one percentage point from the prior quarter, and significantly less than the 80%+ levels reported last year at this time.
• 66% of companies say they will not hire new talent this quarter
• While growth expectations stabilized from their recent declines, just 42% of companies expect sales growth in the next three months
• Across the industry, digital print overtook traditional print as the industry’s primary profit center for the first time in the history of the survey.