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In April, Big Picture magazine and Keypoint Intelligence conducted a survey of sign shops and commercial printers to gauge the impact of COVID-19 on their businesses. The data from the survey painted a grim picture. Respondents projected a year-over-year decline in January through April revenues of 28%. Approximately three-quarters of printing establishments reported a drop-off in sales. Now, two months later, the United States—and, indeed, the world—are trying to gingerly reopen their economies.
Charting a course of action during this pandemic has proven to be a daunting task. The diverse range of economic data doesn’t help. The S&P 500 is up 30% in the past three months, but Federal Reserve Chairmen Jerome Powel warned a Senate panel that the economy faces the risk of significant long-term damage. In May, retail sales popped 18% as pent up demand drove US consumers to open their wallets. Yet, the US unemployment rate hovers around 13%. How is the printing industry faring under these circumstances? To help answer this question, Big Picture magazine and Keypoint Intelligence conducted another survey in June to measure how things have progressed.
The business closures precipitated by COVID-19 continue to have severe impact on printing establishments’ revenues. Of the 63 respondents surveyed, 71% indicated that revenues declined between April and June. Over a third (35%) stated revenues were off 21% to 49%; another 27% indicated revenues declined a stunning 50% or more. The overall decline in industry revenues was 30%.
| Economic Impact on US Businesses (as of Mid-June 2020) |
The question is: Where do printing companies stand in terms of returning to more normal operations? Currently, less than half of them (46%) are fully open with a full staff and 48% are open at limited capacity. Opinions on when the economy is expected to recover are split almost evenly. Nearly half (48%) are expecting a V-shaped recovery, with the economy starting to improve in Q3 and reaching more normal economic activity by Q4. However, over half (56%) are not so sanguine. This more pessimistic group does not see the beginning of recovery until 2021 or later. As a result, it is not surprising that only 18% of printing companies plan to make investments in printing equipment.
Nevertheless, a majority (60%) are seeing an increase in demand for COVID-related signage. Moreover, 27% are producing personal protective equipment, which is up from 16% in the April survey. Applications that are expected to see the highest demand are, not surprisingly, floor graphics and signs. When asked which vertical markets continue to drive demand, healthcare, schools and teachers, label and food industry, retail grocery, art scanning and reproduction, pharmaceutical, police vehicle graphics, machine decals, boats and RVs, and yard signs for school graduates were all singled out. Healthcare had the highest emphasis.
Like the myriad of muddled economic statistics and predictions, the state of the printing industry has its share of conflicting factors. There are early signs of demand returning, but print it is well off 2019 levels. On balance, it remains a tough market. As states reopen for business, companies will need printed products to reopen safely. That said, it remains to be seen when this demand will pick up speed.
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