NPRC Shares July-Sept. Covid-19 Findings

Although the primary purpose of our recent “Survey of Surveys” was to determine where to concentrate our efforts in the next six months, we couldn’t help but ask a few questions regarding Covid-19 and its impact on the printing industry.

Based upon survey data we have gathered since early March 2020, it is clear that Covid-19 has had a major impact quarterly and annual sales for 2020 and into 2021. In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.

“In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.”

In fact, the data NPRC has collected so far strongly suggests many printers are forecasting significant declines in sales through 2021.

Projected sales for 2020 and 2021

Whether we are looking at raw $$$ or percentages, our survey participants, whether we are talking “averages” or “medians,” are forecasting troubled times at least for the next 18-24 months.

Significant Declines in Annual Sales

Relying upon financial data we have collected for more than 38 years, 2020 and possibly 2021 will be the first two years on record where sales (at least forecast sales) will actually be lower than the preceding year. Based upon our most recent data, printers are predicting their 2020 sales will be down -14.5% (Average) compared to 2019. Note the median data is only slightly better, reporting sales for year-end 2020 will be down -11.5%.

Significant declines in sales forecast for 2021

When it comes to key ratios in our industry, we will be the first to admit we have rarely if ever had to prepare and present charts and graphs dealing with “negative” numbers. Nonetheless, it is what is, with significant declines in sales projected through year-end 2021.

What about 2021 Sales? As you can see from the chart above, printers who responded to our most recent survey are predicting that year-end sales for 2021 will still be -6.4% below 2019 sales.

Typically we always calculate “averages” because we need that number to calculate “margin of error.” However, in many cases, this one being one of them, we feel the “median” is probably more reflective of what is happening in the industry. The median, unlike averages, is not distorted by large outliers. And while the latter are often valid, they can easily distort an otherwise realistic “average.”

As you can see from the chart above, many printers are predicting an even greater decline in annual sales for 2021 than they are forecasting for 2020. Part of the reason for this is that sales for January, February, and a portion of March 2020 were generally healthy and unaffected by Convid-19. Thus, it is not surprising to see that the negative median sales projection for 2021 is greater than the median for 2020, since the latter included 2.5 months (Jan-March) of relatively healthy sales.

Covid-19’s Impact on SPE

We continue to rely upon “Sales Per Employee” (SPE) calculations as a reliable method for tracking productivity in the industry. The data we’ve collected since early spring is extremely encouraging. It appears that printers, mailers and sign company owners are clearly reacting to the impact that Covid-19 has had by making significant adjustments in staffing.

Following what turned out to be major reductions in staffing earlier in the year, many employers appear more than willing to make some of those preliminary adjustments in staffing permanent. Employers appear willing to make “permanent” furloughed decisions made earlier in the year, even at the risk of losing some long-term employees. Many owners have reluctantly made significant adjustments in staffing and payroll, believing that is what it is going to take to survive the financial challenges brought about by the current pandemic.

Despite forecast for many problems ahead, sales per employee appears to be holding its own.

We are pleased to note that printers appear to have reacted quickly to Covid-19 and have made significant adjustments in staffing to maintain healthy SPE ratios.

Popularity of NPRC Surveys

Popularity of NPRC Studies

NPRC typically publishes 2-3 industry surveys a year. Companies that participate and complete a survey are automatically entitled to a FREE PDF of the final report. The graph below illustrates the relative participation levels in various surveys based upon our “Survey of Surveys.”

Participation levels in various surveys

This graph illustrates the relative degree of participation in various NPRC surveys.

Perceived Value of Studies – For planning purposes, we asked survey participants (125) to score a list of seven studies we have published in the past five years and rate the studies on a scale of 0-100 in terms of “Perceived Value.” The chart below illustrates the results.

Perceived value of various NPRC research studies.

We asked survey participants to rate or grade the overall perceived value of eight different studies we’ve published in the past five years.

Our Next Study – Based in large part on the feedback we received, NPRC has decided to launch a new industry 2020-21 Wage & Benefits Survey within the next two weeks. Not only does this study typically attract a healthy level of participation, it presents data that is critically important, especially in a time when employers are cutting costs, but also carefully monitoring labor costs.

“…end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.”

It is one thing to discover that you might be paying an above average wage to a key yet “average” employee, but it is another thing entirely to end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.

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