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Wednesday, April 18, 2018

Fifth drupa Global Trends Report reflects positive mood in printing industry

The 5th drupa Global Trends Report will be released end of April 2018. Printers and suppliers from the majority of market sectors reported growing confidence in their companies’ economic performance. This year, performance patterns were tracked over the years. Packaging remains the most dynamic market and there has been a steady improvement in confidence over the five years among commercial printers. For functional printers it is a similar situation but this market showed an increased lack of confidence in 2017 for both printers and suppliers. Publishing printers probably face the most challenging strategic changes and there is a decline in confidence despite the reduced threat from E-books. The full report in English can be purchased online at www.drupa.com, with the executive summary available in German, English, French, Portuguese, Spanish, Russian and Chinese free of charge.
Sabine Geldermann, Director drupa at Messe Düsseldorf, commented: “The report indicates that print can be optimistic about the future. After the 2008 global recession and the consumer shift to digital communications, printers and suppliers are taking full advantage of the slow but clear global economic recovery. They develop new business models, innovative future technologies and broaden the versatile application of print.”

Over 700 printers and almost 250 suppliers (senior managers who visited drupa 2016) participated in the survey conducted by Printfuture (Great Britain) and Wissler & Partner (Switzerland). Richard Gray, Operations Director at Printfuture, stated: “Both printers and suppliers clearly understand the strategic challenges that print faces. However there is increasing confidence in a strong future for printers in most markets and regions, as long as they analyze their target markets carefully and make suitable innovations to meet the future needs of their clients’ customers.”

Challenges for some regions but strong growth in suppliers’ core sales
Regionally, the situation is positive in general but with exceptions. North America has consistently been the strongest region over time, although Europe has shown steadily increasing confidence while Africa and the Middle East see clear decline in confidence over time.

Globally, this is the fourth year of increasing confidence reported by suppliers. Noticeable is the increase in sales of core equipment/software/materials (+29% net total). Overall, all supplier revenue streams showed their best ever net positive balance.
Printers globally report that the pressure on prices and margins continues and is coped with best by ever increasing capacity utilization and hence revenues which hold costs as steady as possible. There is evidence that over time the squeeze on prices and margins is somewhat decreasing globally. However, regionally the situation is inconsistent. While North America reported some increase in prices, Australia/Oceania reported a clear drop in pricing. Package printing prices are holding up globally while publishing and - to a lesser degree - commercial printing prices continue to decline.

Digital print grows but conventional print still dominates
The transition to digital print continues but slowly, with functional printers now largely dependent on digital print and only a few packaging printers currently report significant digital sales (60% of functional printers report that more that 50% of turnover is digital, while for just 12% of packaging printers more than 25% of turnover is digital). Especially noticeable is that only 27% of all printers operate a web to print /storefront installation, up just 2% from 2014.

Globally, printers were more willing to invest: 42% reported an increase in capital expenditure compared to the previous year while 9% reported a decline – a positive net balance of 33%. North America performed best with a net balance increase of 51%, while Australia/Oceania lagged farthest behind with a net increase of only 18%. Not surprisingly, packaging printers reported the largest positive net balance at +45%, functional at +42%, commercial at +30% and publishing at +20%. Finishing is the most popular focus for investment for the second year in a row, followed by print technology and prepress/workflow/MIS.

Plans for print investment in 2018 depend on the market sector, with flexo as the most popular choice in packaging, followed by sheetfed offset. In commercial printing, digital toner cutsheet color is leading, followed closely by sheetfed offset and digital inkjet wide-format. In publishing printing it is sheetfed offset, followed by digital toner cutsheet color. In functional printing digital toner cutsheet color takes the lead and digital inkjet wide-format comes in second.

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