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2013 US Commercial Printing Shipments Reach $77.6 Billion

By on February 4th, 2014

The Department of Commerce released December 2013 and revised November data. December shipments were $6.271B (-3.7% vs. Dec. 2012). On a current dollar basis, the total for the year was $77.6B, -3.8%. After adjusting for inflation using the Consumer Price Index, shipments were down -5.1%. The chart below shows current dollar and inflation-adjusted shipments starting with 2007 (click to enlarge).

ptg shipments for 2013 020414

These data are not final; December gets revised next month, then there are other revisions in May.  If the Commerce Department follows the same pattern as previous years, they will go back three years with major revisions (2011-2013) and an additional two years of tweaks (2009 and 2010). The major revisions can add or subtract up to $2 billion of shipments for a year, and can change the relationship of shipments for the months, creating a new seasonal pattern. The tweaks usually keep the annual data the same but shift some of the data among the months.

Speaking of seasonality, the chart below shows how the seasonality of printing shipments have changed. The top line is 2007; the recession did not start until December of that year. More important, however, is that was the last year before significant adoption of social media. Facebook and Twitter were nothing. Today they have a combined stock market capitalization of $190 billion. Holiday retail printing is clearly evident in the shape of the line (click to enlarge).

ptg shipments 2007 2010 2013

The 2010 pattern shows a much different pattern. Shipments were down, the absence of a holiday printing surge is noticeable. Tablet computing made its first appearance in 2010.

The bottom line is 2013, which shows end of year printing being lower than the beginning of the year. The idea that May is the biggest month of the printing year is confusing to me. From my data investigations it’s not that anything special happens in May, it’s just that May has declined at a lesser rate than other months.

The lines reflect the media shift away from traditional print. While it was happening, big printing company management kept running their businesses with the assurance that the end of the year would always be big. When that stopped happening, they tended to blame economic factors, and not the media shift. The changes in the importance of end-of-year printing were seen well before 2007, but no one seemed to take note. Eventually, in 2009 and 2010, the realization seemed to finally sink in.

How the patterns will continue to evolve is not really known. In 2013, the first six months of the year were -2.2% compared to 2012 on a current dollar basis, and down -5.1% for the second half.

In 2014, the industry will be dealing with the continued penetration of tablets and smartphones, but also the increase of postal rates beyond the rate of inflation. When 2013 started, I forecast the industry to end up at $77.5, and that was a good forecast. In mid-year, however, I raised it to $78.5, thinking that the first half was better than I thought it would be. I was obviously wrong in the revision.

For 2014, I have a rough forecast of $74.5 billion which I will refine over the next weeks.

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  1. 7 Responses to “2013 US Commercial Printing Shipments Reach $77.6 Billion”

  2. By Wayne Lynn on Feb 5, 2014 | Reply

    Good morning Joe,

    If you read this closely, this means the industry has shrunk, in inflation-adjusted terms, by about a third in the past 7 years. Assuming that these shipment data include the new revenue streams that companies are beginning to build, what (in inflation-adjusted terms) is the real decline in print demand? Is there print revenue that has been shifted into other Commerce department classifications?

    Wayne

  3. By GaryAmpulski on Feb 5, 2014 | Reply

    Wayne raises a good question about the mix change for the industry.

    Isn’t this data for all establishments in the NAICS 323? So if suppliers are changing their mix internally it would not be reflected in these numbers. Perhaps the erosion in volume is due to smaller establishments leaving the base. I don’t think the larger businesses are contracting at the same rate as the industry in general implying that the number of establishments in NAICS 323 is reducing at a faster rate due to consolidation and financial viability of the smaller establishments.

    It will be interesting to track the combined volume of CGX and RRD the years before and after consolidation to see the specific effects on top and bottom line. The problem with that will always be how much of the CGX year over year change is “same store sales” as they have been an industry consolidator for some time.

    Dr Joe. You have shown the breakdown by employment size in the past. Can you update that for us?

  4. By Dr. Joe Webb on Feb 5, 2014 | Reply

    This post from July highlights industry changes
    http://blogs.whattheythink.com/economics/2013/07/ten-years-of-commercial-printing-process-shifts/

    Smaller printing establishments are exiting the base at a slower rate than other sizes, but that is misleading. While there are many establishments with 1-4 employees, that is also the category where dying 5-9 employee establishments, former 10-19 employee establishments, etc. go to die from a statistical perspective. So that 1-4 category has true printers and previously larger establishments with last employees whose main assignment is to do the final tax reports and turn out the lights.

    Remember, CGX and RRD have been contracting beforehand prior to recent acquisitions and their merger. Their original core businesses were having problems and they’re combining to gain some benefit from eliminating duplicate functions while aggregating non-duplicated market segments.

    I’ll put the demographics in an upcoming blogpost. I’m also updating the writing I did about the effect of “survivor bias” in industry data, which will also give some perspective.

    Regarding Wayne’s question, in a recent survey we asked commercial printers about their business conditions in 2013 compared to 2012, and then we asked those who had increases if they had made acquisitions or merged. Once we took the effect of the mergers into account, most of their sales increases disappeared.

    We know that many printers have established “agency front-ends” to their businesses. In the aggregate industry data they do not add much to the industry volume but the can add to the volume of individual firms. Data are for total revenues, and they are broken down in the Census data. The 2012 Census data will be released sometime this Summer, most likely. We’ll have a better picture at that time.

    There are printers that establish separate businesses for these activities, and if separately incorporated would not be included in the printing industry data. If printers change the NAICS code on their tax returns, then their revenues will be counted under whatever new NAICS designation that they have selected. Again, the 2012 Census may shed some light on these questions.

  5. By Gary Ampulski on Feb 6, 2014 | Reply

    Very helpful and insightful.

    One clarification. Your second to last paragraph indicates that the Census data is broken down by revenue type. (Should that be “not broken down”?)

    Looking forward to upcoming blog posts.

  6. By Dr. Joe Webb on Feb 6, 2014 | Reply

    The data ARE broken down by revenue type in the Economic Census. How granular they will be when released is another matter. When the industry was bigger in relation to GDP the 1987 and 1992 Census of Manufactures and the 1997 Economic Census had all kind of “secret” statistical treasure. From looking at their schedule at http://www.census.gov/econ/census/schedule.html we’ll start seeing some detail in Q4, and then the really detailed stuff at the end of Q2-2015. Hope you can wait :) The 2007 Economic Census data is incredibly out of date for us; it’s pre-tablets, basically pre-social media, pre-recession, and essentially pre-smartphone. Shows how much can happen in five years.

  7. By Charles Turner on Feb 25, 2014 | Reply

    Has there been any data compiled on how many manufacturing companies have shifted to in-house operations instead of going to a “traditional” printer? I know of one company here in Atlanta that purchased an Indigo and complimentary bindery equipment and does work for multiple branch locations. Do you see any type of shift coming on the horizon for mid sized companies bringing more in house?

  8. By Dr. Joe Webb on Feb 28, 2014 | Reply

    There is always some shift back and forth, but the peak of inplant was in the mid-1980s and it has contracted ever since. The company you cite is against the general trend. One of the reasons for the contraction of inplant printing departments is how sophisticated copying and digital printing equipment have become, how easy to use word processing and desktop publishing have become, and imaging technologies as well.