1 August 2024

Output and order growth slow and steady in Q2 as confidence remained in the doldrums – expectations remain positive for a stronger pick-up in Q3

The slow and steady improvement for output and order growth in the UK's printing and printed packaging industry has continued in the second quarter of 2024. The forecast was for stronger growth to come through in Q2, but now that the BPIF has published its latest Printing Outlook report (for Q3 2024) that expectation has been downgraded slightly, and rolled over, into Q3. However, we have now had three consecutive quarters of growth, and the improvement is expected to accelerate in Q3.

VOLUME OF OUTPUT - Q2 IMPROVEMENT BELOW FORECAST, Q3 EXPECTATION IS POSITIVE

The output balance of +10 was below the forecast of +25 for Q2. A balance of +22 is forecast for Q3.

Wage pressures, linked to historically high inflation and the knock-on effect of maintaining wage differentials connected to the hike in national minimum wage levels has continued to have a significant impact on companies in the latest survey - as most concluded their pay reviews in Q2. A difficulty in finding suitably skilled labour has also contributed to the wage pressure.

LABOUR COSTS - WAGE PRESSURE SURGED FURTHER IN Q2, LIKELY TO EASE IN Q3

A balance of +66 in Q2 was above the forecast of +56. A balance of +13 is projected for Q3.

Industry competitiveness is fierce - companies pricing below cost (or the perception that some are doing so) has become the top ranked business concern. However, controlling costs, researching new markets, and putting efforts into driving sales are all key target areas for companies that are striving to improve their profitability.

PLANS TO INCREASE PROFITABILITY - % OF RESPONDENTS SELECTING

The BPIF Printing Outlook Q3 2024 report features sections on industry turnover, business concerns, costs, pay reviews, paper and board, and much more.