BPIF has released the Printing Outlook Report, Q1 2022

The UK printing and printed packaging industry has continued its recovery in Q4 – a majority of companies increased their output and order performance, and many expect to see further improvements in Q1.

The Q4 improvement came despite the introduction (in December) of the Government’s ‘Plan B’ measures, in an attempt to dampen the spread of the Omicron Covid variant. Threats to future recovery and growth remain prominent, especially from increased Covid disruption and the spiralling costs of supplies, labour and energy.

The latest Printing Outlook survey reveals that 63% of printers managed to increase their output levels in the fourth quarter of 2021. A further 19% were able to hold output steady, however, the remaining 18% did suffer a decline in output. The resulting balance (the difference between the ups and the downs) was +45, not quite as good as the +45 in Q3, but above the Q4 forecast (+38). Whilst the imposition of ‘Plan B’ came quite late in the quarter it did still have a considerable limiting effect for those companies that work with clients in the events and hospitality sectors.

Summary of key findings:

• The UK printing and printed packaging industry has continued its recovery in Q4, and many expect to see further improvements in Q1.
• The latest monthly turnover data (for November 2021) at almost £1.2 billion is the highest since November 2019 but remains 5.5% lower than that pre-Covid comparison (to November 2019).
• Activity levels are expected to remain positive, but not quite as strong as we move through Q1.
• Confidence in the general state of trade did continue to improve in Q4, just not for as many respondents as in Q3 – the forecast for Q1 is less confident but does still remain positive.
• Substrate costs remain the top business concern for printing companies – for the third successive quarter. Energy costs have now moved up to second place in the priority ranking.
• Industry capacity utilisation was not quite as strong in January as it was in October.
• A supply shortage of raw materials remains the most challenging issue affecting companies’ ability to recover from the impact of Covid-19.
• The vast majority (96%) of respondents do not expect to make any redundancies before the end of March.
• The process of returning employees to the office environment took a bit of a setback – following December’s ‘Plan B’ restrictions and the reintroduction of the ‘work from home’ guidance.
• Employment levels have continued to increase, on balance, in Q4 as more companies (than in Q3) recruited new employees. The forecast for Q1 suggests the industry is still looking to recruit new employees.
• Companies in the printing and printed packing industry continue to be faced with unprecedented levels of cost increases across all major cost areas in their business. Paper and board costs continued to provide the most inflationary pressure in Q4.
• In 2022, more Companies are looking at targeting investment to help them adjust to the new growth opportunities and ride cost exposures. The top three investment targets are – workflow and automation, bindery and finishing, and management information systems.
• Throughout the course of the pandemic, many companies have struggled to deal with significantly curtailed trading levels, cashflow pressures, and rising debt levels – however, the evidence suggests that the Government schemes have helped provide some much-needed stability to financing and credit conditions.
• UK consumption of printing papers and boards have continued to steadily recover throughout 2021 – in Q3 2021 consumption was greater than in Q2 2021, and Q3 2020. However, consumption remains 15% below pre-pandemic consumption levels (in Q3 2019).

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