While production levels for the printing industry during the quarter ending March 2011 are lower than expected, industry is expecting brighter days ahead, according to the latest Printing Industry Trends Survey Report.
For the March 2011 quarter, survey respondents reported:
• reduced orders and production;
• reduced sales and net profits;
• reduced employment and overtime levels;
• reduced investment in buildings but increased investment in plant and machinery during the past six months;
• finance reported harder to obtain for the 13th consecutive quarter;
• labour availability reported to have deteriorated for the 5th consecutive quarter;
• moderating material and wage cost pressures;
• selling prices reported to have fallen for the 41st consecutive quarter;
• reduced levels of raw material stock levels: and
• increased numbers of outstanding debtors.
The survey showed that just 52 per cent of respondents said that they were operating at a production capacity of 70 per cent or more. The figure is slightly less than that reported in the same quarter last year (58.9 per cent).
Around 89 per cent of survey respondents – slightly higher than the 85 per cent reported in the same quarter last year – said the lack of orders was the primary barrier to increasing production levels.
The labels, graphic reproduction, books, magazines, periodicals and newspapers sectors reported higher production capacities. Considerable levels of increased capacity were also reported in the screen printing, packaging and folding carton sectors.
The next six months
The June 2011 quarter is expected to yield the following results:
• Reasonable net balance increases in orders, production, sales and net profits;
• Reduced employment and overtime levels;
• Reduced availability of finance and labour;
• Lower selling prices;
• Reduced stock levels;
• Further net balance increases in all production cost categories – average wages, other labour costs, and average material costs; and
• Increased number of outstanding debtors.
• Increased investment in plant and machinery investments; and
• Reduced investment activity in buildings.
While most sectors are forecasting improvements or no changes to take place in general business conditions during the next six months, the folding cartons sector is expecting a fall in production.
The outlook for general business expectations over the next six months is looking most optimistic for Western Australia with a net balance of 54.6 per cent, followed by Victoria with a net balance of 27.6 per cent.
Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, said that differences in performance and intentions were based on company size.
“Mid-size businesses are more optimistic about business conditions then their smaller and larger counterparts. But when it comes to capital expenditure intentions, the larger businesses still have positive sentiments” he said.
“In the area of employment intentions, smaller establishments are forecasting increased workforces while labour shedding intentions seem to be concentrated amongst mid to large sized businesses.”
Tchamkertenian said the March 2011 quarter outcomes may have been influenced by both seasonal influences as well as the general softness in economic conditions.