Melbourne, FL, July 23-2020 – The National Printing Research Council (NPRC) has just published its latest report that explores the impact of Convid-19 on the printing industry. The report is based on a survey conducted between July 10-16, 2020. The 24-question survey attracted more than 190 participants.
Distribution of the initial 9-page report was and is being limited to participants only. Survey participants were provided confidential download instructions between July 22-23.
The complete report, however, will be made available to all printers, regardless of participation status, on Aug. 10, 2020. “We are slowly learning our lessons. Having now conducted three Covid-19 Surveys, we couldn’t help but notice a subtle decline in participation levels,” notes John Stewart, Executive Director of NPRC. “We believe many firms chose not to complete additional surveys because they assumed they would be able to read the results anyway,” adds Stewart.
“Free distribution of survey results will not longer be the case,” notes Stewart. “Henceforth, we will make it clear in our survey promotions that results of our surveys will only be provided to survey participants. Additional distribution to non-participants will be at our discretion.” adds Stewart.
Sharing of Some Results…
Based upon the results of our survey, it is easy to conclude on the one hand that the printing industry appears quite resilient. On the other hand, it is also quite clear that the vast majority of printers will be facing major challenges in the months and possibly years ahead. While it is no surprise that 2nd quarter sales would be down significantly, projections for the 3rd quarter of 2020 appear even worse, according to our data.
Looking forward to the 4th quarter, we find that printers are projecting a 26% decline in sales ($415,295 down to $307,025). Examining median figures we find that the projected drop in sales is even worse at almost 32%.
Dramatic Decline in SPE
With the dramatic decline in sales beginning in early March 2020, it is also no surprise that sales per employee (SPE) took an even greater dramatic hit due to the delayed reaction by most printers as to how they would handle payroll and staffing issues.
The chart below illustrates the dramatic decline in sales per employee as first calculated for Jan-Mar. 2020 and then for subsequent periods. Notice the dramatic 44% decline in average SPE between the 1st quarter and the 2nd quarter.
While the 1st quarter SPEs might be considered somewhat “optimistic” in terms of national averages reported in the past, the SPEs reported for the remaining three time-frames are signs of a troubled industry, especially if this trend continues into 2021.
Generally speaking, SPEs are indicative of relative degrees of productivity and there is little doubt that Covid-19 has directly and indirectly impacted productivity of the average printing firm. We suspect it will be at least 12-18 months before we see a return to healthier SPEs.
A special note as to our SPE calculations. The data below is most useful and informative when examined within its own context, as opposed to comparing to historical SPEs reported in other studies. Nonetheless, the periodic changes are reliable in terms of the time frames noted.
Impact of Convid-19 on Your Business
Our survey asked printers to what degree has Covid-19 impacted their business during the January-June time-frame. As you can see from the graph below, approximately 78% of all participants said Covid-19 has had a significant if not catastrophic negative impact on their business. The results are certainly not surprising. Some printers will clearly learn to roll with the punches, but many others will keep absorbing them until they can’t take it anymore.
Clearly, learning to closely monitor, control and reduce total labor costs will continue to be the single greatest challenge facing printers in the next 6-12 months. Printers who fail to grasp the critical significance of payroll costs as a percent of sales and who fail to react quickly to these “red flags” may find themselves facing even greater changes in the 2nd half of this year than they faced in the first half.
Reacting quickly to sharp declines in sales with equivalent adjustments in labor costs is a skill that needs to be sharpened in this era of Covid-19.
Despite an abundance of discouraging “negative data” collected in our most recent survey, we were surprised and encouraged to find that almost 24% of our participants told us the they have enough cash reserves to last at least six months, while an additional 50% say the can last one year or more.
One of our key survey questions posed the following: “Taking into account all that has transpired in the past four months (March – June), how would you rate your confidence level that your business will be somewhat ‘back to normal’ or better by July 2021?” The scale we used went from “-100” on the left, “0”0 at the center point to “100” on the right.
We intended and interpreted that firms selecting the center point were indicating a 50-50 confidence level that things would return to normal. Or, another interpretation might be that 28% of participants were sort of “neutral” in their predictions, selecting neither a positive or negative view of what might happen between now and July 2021.
Participation in Future Surveys?
As noted earlier, we intend to supply the entire 9-page Covid-19 #3 Summer report no later than August 10, 2020. We strongly encourage you to participate in future surveys. We are the only association serving the printing industry that brings you up-to-the-minute surveys and reports. We are proud of the caliber and quality of the reports we publish, whether they be various pricing reports, mailing and signs studies, or statistical studies reporting on the latest financial benchmarks in our industry.
We encourage you to visit our Blog (See tab at top of HOME page) or our Bookstore. When visiting the Bookstore, you can click on any of the dozen or more studies depicted to obtain additional information. In most cases, we offer a free preview of the Table of Contents for each study. Oftentimes, we also provide for free down loads of sample pages as well. Best yet, all of our studies are offered on a 100% money-back guaranteed basis.
Revision date: 7-23-20, 4:45 p.m.