Print-Industry Research Suggests Economic Slowdown Is Likely to Continue in 2024

The economic slowdown that the printing industry experienced in 2023 is likely continue to well into 2024. That is one of the key findings from the PRINTING United Alliance’s midyear 2023 State of the Industry/Economic Outlook reports.

At a keynote presentation at the 2023 PRINTING United Expo, Chief Economist for the PRINTING United Alliance Andrew Paparozzi presented survey data that supports this finding. He also discussed steps the most successful print-service providers are taking to achieve profitable growth in 2024.

“Always go on offense, because playing defense rarely pays off,” Paparozzi said. He noted that winning companies don’t retreat into survival mode and wait for economic conditions to improve and interest rates to go down. Instead, they move aggressively to capture market share and attract talent from competitors.

“The best way for print businesses to come out of an economic downturn better than when the downturn started is to stay focused on achieving profitable growth in 2024 and beyond,” Paparozzi emphasized.

About the Research

To compile the Midyear State of the Industry Report, the Printing Industry Alliance surveyed print-service providers (PSPs) about trends in sales, operating cost inflation, prices, real (inflation-adjusted) sales, margins, and profitability.

The 206 survey participants were involved in one or more segments of the industry, including commercial printing, wide-format graphics and signs, apparel decoration, package printing/converting, promotional product imprinting, and functional printing. More than 68 percent of respondents had diversified beyond their primary printing segment. Annual sales ranged from under $500,000 to more than $500 million.

The survey also asked participants open-ended questions such as “What have you learned from the upheaval of the last three years (e.g., fractured supply chains, unprecedented uncertainty, and the worst cost inflation in decades)?

Five Actions of Winning Companies

The companies least affected by the current economic uncertainty and upheavals of the past 3 years identified some of the steps they are taking to improve conditions within their companies. Steps include:

  • Embracing artificial intelligence to maximize productivity
  • Strengthening risk management
  • Developing and retaining a skilled workforce
  • Using better data to drive decisions
  • Determining how to turn potential threats into opportunities

Using Artificial Intelligence (AI): Paparozzi believes AI is unlike any technology we have seen before: “It requires us to dramatically broaden our definition of productivity and automation.”

“What makes artificial intelligence revolutionary is that it allows us to automate activities, functions, and processes that we could never automate before,” he explained. “And not only does it automate, but it enhances through machine learning and natural language processing. It learns by doing. As it is exposed to more and more data, it refines, strengthens, and enhances its capabilities.”

He said PSPs aren’t just using it to create content, but also for market analyses to identify potential target markets for growth or diversification. Some PSPs are using it to create new functions for their websites, simply by writing text instead of code.

To get started with AI, Paparozzi suggested these steps:

  • Identify and prioritize potential ways to use AI;
  • Identify AI applications that address those functions;
  • Evaluate the strengths and limitations of each application;
  • Train employees how to use AI within your organization.
  • Learn to “speak AI” with the right prompts for the application. .

Manage Risks: Survey participants have learned over the past three years that no matter how well a business is doing, business conditions can turn in an instant. So, Paparozzi point out that it’s wise to be prepared for worst-case scenarios that might occur during an economic downturn. Identify current and emerging risks that could keep your company from achieving its goals.

For example, ask questions such as: “What if our most important client reduces spending with us by 20%?”
“What if elevated interest rates slam our major market?”

To remain profitable, consider creating a contingency strategy for every client who accounts for more than 30% of sales or growth profit.

Developing Your Workforce: Paparozzi suggested the developing your workforce can help your shop become an employer of choice. Steps business leaders can take include:

  • Cross-training employees in order to have a back-up for every employee in the organization
  • Prioritizing company culture so you can come out of an economic downturn stronger than you went in.
  • Building a compelling employer brand with unique policies, programs, rewards, and benefits.

Using Data to Drive Decisions: In the printing industry, the gamut of opportunity in expanding in the printing industry, the margin for error is shrinking. So, it’s important to replace gut instinct with hard evidence: To become a more data-driven organization, consider these steps:

  • Treat data as a business asset
  • Recognize the value of data in reducing risk
  • Ensure all departments share the same data (a “single source of truth”)

For More Information

The PowerPoint presentation for the keynote session at PRINTING United Expo can be downloaded through the link below. During the second half of the session, co-presenter Lisa Cross, principal analyst, NAPCO Research, discussed trends and opportunities for success. These trends will be highlighted in a separate post.

Click here to download the presentation slides from the NAPCO Research Keynote at the PRINTING United Expo 2023.

Members of the PRINTING United Alliance can access the full reports and executive summaries on the Alliance’s Research page.