Publication printing segments – newspapers, magazines, books, directories and catalogues – are declining significantly, although packaging and labels are experiencing healthy growth rates.
UK publication print volumes are expected to decline by 3.7% on average over the next five years in real terms. In publication and commercial graphics ‘new media’– ebooks, online, electronic and social media –are steadily replacing many previously printed products. Search engines have largely replaced printed directories, and satellite navigation and smartphone apps replace road maps, marketing has followed this trend with more of budgets committed to website and email adverts.
Digital print – analogue and toner platforms – chiefly used in the commercial print sector and labels is faring rather better than the long-established analogue alternatives. In 2015 it accounted for just 2.5% of print volume, but 14.6% of the value and this will grow to 18.4% by 2020 as new applications, particularly in packaging, grow. It is the higher value that is attractive to print service providers and to equipment and consumable suppliers.
For printed packaging and labels, UK output is forecast to grow by 2.2% per annum at constant terms through to 2020. More transactions are electronic, reducing demand for physical currency and cheques, while advertising spend is exploring new areas with mobile ever more important. Also there are improvements in demand forecasting: for example, in newspapers and weekly magazines distributors will look at real retail sales data to determine the demand, and set the following week’s production accordingly.
In books the adoption of high-performance inkjet has lowered the unit cost of book manufacture for short or single runs, allowing publishers to repeat order fewer copies of a title as it sidestep the prepress and setup cost – and physical wastage –associated with litho printing. If an initial order is successful printers can produce another run on demand, quickly. This reduces unsold copies, but impacts overall print volumes, as these copies are no longer printed.
As UK print service providers become more efficient, using better workflow and automation to minimise make-ready and lower waste, reducing demand for paper and inks.
These factors are also leading to declining volumes for many graphics products. There are similar efficiencies in packaging, where digital enjoys very low share (except for labels) and overall demand is growing. As digital systems develop there will be supply chain efficiencies reducing waste, stock holdings and delivery times for converters and brands.
Compared to other developed Western European countries, the UK’s economic circumstances have been relatively benign in recent years. An immediate financial shock from the Brexit decision has not materialised, but any future downturn is likely to affect principally those sectors that are already under pressure – graphics and to a lesser extent publication products. In contrast packaging as has been shown by the recession that began in 2008 is much more robust to such changes in outlook.
All these trends and more are examined in greater detail in Smithers Pira’s report The Future of Global Printing to 2020 providing insights into new and emerging technologies used throughout the global printing industry that are set to shape the future of this market.