INDUSTRY / NEWS 6 email: news@printmonthly.co.uk March / April 2024 - Issue 347 PrintMonthly printmonthly PrintMonthlyMagazine Industry members react as the UK falls into recession The Office for National Statistics (ONS) has revealed a 0.3% decline in gross domestic product (GDP) between October and December 2023, meaning technically the UK economy has entered a recession due to GDP falling for two or more quarters in a row. In an announcement on February 15th, Labour shadow chancellor, Rachel Reeves, said: “Rishi Sunak’s promise to grow the economy is now in tatters. The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than fourteen years of economic decline.” The ONS says that in terms of output there were falls in all three main sectors in Quarter 4 of 2023 with declines of 0.2% in services, 1.0% in production, and 1.3% in construction output. Speaking to Print Monthly, general manager at the Independent Print Industries Association (IPIA), Brendan Perring, says: “What is currently happening is concerning but I do think there is light at the end of the tunnel. As long as nothing else goes wrong, I think this recession will continue through to the middle of the year.” Perring explains that in the past the print sector economy has not always reflected the general economy as often financial turbulence can cause a big amount of competition and marketing from brands and retailers which fight for a “reduced pool of money” which equates to bigger print volumes. “We always base our IPIA analysis off our constant communication with the grassroots of our members,” says Perring, adding: “Members are saying there’s been a noticeable slowdown and business has gone much quieter recently. This encompasses everything from print procurement to technology and machine investment.” In November 2023 the British Printing Industries Federation (BPIF) released its Printing Outlook which stated that output and orders remained subdued in Q3, but improved confidence meant expectations were positive for Q4. Forecasts at the time expected an improvement in output growth, with the caveat that fewer companies would experience declining growth rather than a seasonal boost for all. Charles Jarrold, chief executive of the BPIF, said: “The survey newly reports on uncertainty levels, thankfully they are now expected to stabilise and, with more than threefifths of the industry with an excellent or good cash flow position, there is well-founded hope for the period ahead.” Regarding the reasons for instabilities in the marketplace and consumer confidence, Perring says the increasing number of global issues are all giving consumers and marketers hesitancy when purchasing or making investments. “If you are a marketeer sitting in the head of a major brand and looking to do a national print run, you are looking at the world stage and you are seeing the disruption in the US, Europe (with the Russia/Ukraine situation), and now in the Middle East. “Looking at that disruption and the fear it instils in consumers will make you think twice about going ahead with your new print campaign which tells everyone how wonderful everything is, and that people should invest in your products.” Regarding the build-up of a recession, Perring has explained how the timeline of the pandemic and the industry recovery since has built up to this moment. “Our overall findings are that during the disruptive Covid period around 40% of print volume was lost as orders were never placed because of the pandemic and then were never placed afterwards. “There was never a re-spike in demand to make up for that loss. Many companies took out various types of loans and were supported by furlough to make up for that loss but as work never increased past normal levels, this put a lot of stress and tension into the market.” Brendan Perring estimates the printing industry is close to 98% of overall printing output compared to before the pandemic By David Osgar
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