Performance of the printing industry in times of crisis

Mario Busshoff

6. April 2020

Risks and opportunities for the printing industry in the corona crisis

In the current crisis, two opposing dynamics can be seen in the printing industry. On the one hand there is a decreasing dynamic in the Print Media sector and on the other hand the growing dynamic in the Packaging sector. In this article, we look at both dynamics to show how performance can be increased for companies in the printing industry. It is important not to be discouraged by the risks of the current crisis, but to recognize and take advantage of the opportunities.

Decreasing momentum in the print industry in the area of ​​Print Media

Of course, the corona crisis also hits the printing industry hard. In particular, sales in the print media sector are shrinking sharply. Marketing budgets are cut, advertising and print media are suspended. The result: machine utilization drops. In addition, even before the epidemic, declines in print jobs in the print sector were clearly visible. The high migration to digital media has led to a decline of around 4-6% per year worldwide. Even in the financial crisis, the print media sector was hit hard with a decline of approx. 10-15% – and that there was no significant recovery phase after the crisis. Now it can be assumed that the current corona crisis will lead to an even higher decrease of approx. 20%. In order to increase the performance of your own company, it is important to accelerate the transformation processes that are usually already running.

Growing dynamics in the printing industry in the packaging sector

The situation is very different in the packaging sector. There can be no question of declining order volume. The opposite dynamic is emerging. In the past decades, the consumption of packaging products has increased in relation to the gross domestic product. There was in average a three percent global growth rate. Experience has shown that the growth rate increases even faster than the BPI in economically difficult times. This can also be seen in the current crisis. The reason is simple: The packaging industry is considered systemically important worldwide. In contrast to the 2008/09 financial crisis, cleaning and hygiene products, household items and food are now being brought urgently to the supply of the population. Individual citizens also have more money at their disposal to stock up on consumer goods. Since restaurants and pubs remain closed, you save your money and prefer to spend them in the supermarket.

There will probably be two phases in the Corona crisis

As in the past, we are experiencing a development in two phases in the current crisis. In the first phase there is a lock-down. Consumers can only buy packaged goods in supermarkets. Small shops with unpacked food are closed. In contrast to the printing industry, online retail is experiencing a surge in growth. Despite the crisis, cardboard boxes are increasingly needed. The cardboard box is celebrating an unprecedented renaissance and online retailers are happy. The term flood of parcels is by no means an exaggeration. The same applies to plastic products, which are also classified as systemically important. The demand for packaging from the pharmaceutical industry, for example for disinfectants, is also increasing continuously.

In order to be able to work flexibly and professionally at home, the equipment is of crucial importance. Therefore, high-quality electrical items are urgently needed in the home office. This area shrinks significantly in times of crisis, when income normally falls. The opposite is the case now. In the second phase, which will be very similar to the financial crisis, the packaging industry is likely to weaken economically, as consumers now have less money at their disposal. The containers become smaller, so that the costs per piece decrease. Electronics purchases will also decrease. The bottom line is that both online retail and the cardboard industry benefit, because in the future consumers will get used to the changed range of goods, and may even find it good – according to the forecast.

Is the crisis an opportunity for the printing industry?

Anyone who is now in an existential dilemma will hardly be able to see the strip of light on the horizon. 30% of companies in the printing industry currently expect their production to be reduced, and at least 15% will switch to short-time work. But companies can also use the crisis to accelerate transformation processes and seize opportunities. This means that a company can even emerge stronger from this crisis. As a specialized consultant for the printing industry, I would be happy to assist you in this transformation phase.

Sources:

  • https://www.bvdm-online.de/presse/pressemitteilungen/2020/bvdm-konjunkturtelegramm-maerz-2020-geschaeftsklima-kuehlt-sich-deutlich-ab/
  • https://www.acatech.de/wp-content/uploads/2020/03/acatech_CORONA-Krise.pdf
  • https://www.neue-verpackung.de/65660/verpackungsbranche-im-krisenmodus/https://www.kiweb.de/default.aspx?pageid=311&thema=100022

Ähnliche Beiträge

5 tips for effectively leading a virtual team

5 tips for effectively leading a virtual team

Successful management of a virtual team Virtual teams offer great opportunities to use employees efficiently over large distances using technology. However, the requirements for managers have changed significantly due to the digital possibilities. In the following, we...

read more