Market Research


Semper International, a placement firm that services the graphic arts and printing industry, has published a study in which it found that despite some growth in Q3, the industry will likely witness some stagnation in the fourth quarter.

“Every sector of the economy has felt the effects of government mismanagement. From sequester to the recent government shutdown, the government’s lack of activity is hurting people,” says Dave Regan, CEO of Semper. “Semper is in the unique position of seeing the pain from both sides of the coin. We see companies struggling to keep their doors open, and we see jobseekers struggling to put food on the table and keep a roof over their heads. We need Washington to step up and provide the stability and incentives businesses need to see to start hiring and investing. It's the only way we're going to get the economy moving again.”

Survey participants include more than 300 small, medium and large printing companies in the U.S.; both clients and prospects of Semper International. While a few Canadian companies were asked, none participated in this survey. Participants provide data on revenue and hiring as well as estimated outlooks on future trends. Data is requested from a random sample and is not screened. Semper has been running quarterly surveys since February 2003.

Key findings from the study include:

• 71% of companies surveyed reported a profitable Q3. This represents a 3 point increase over second quarter.
• 42% of survey respondents reported an increase in revenue over last quarter.
• Looking at the two weeks before the survey was taken, 34% of companies reported an increase in current sales, matching data from the third quarter survey.
• 40% of companies expect sales to increase through the remainder of Q4, 2013 while 36% expect sales to stay the same. Last quarter 56% expected a sales increase and 30% expected sales to stay the same.
• The vast majority of respondents indicated that hiring levels will remain the same or increase, nearly the same as last quarter.
• Just under half of companies reported that healthcare is still the labour cost component that increased the fastest last quarter. Healthcare has remained the fastest growing component of cost for the last 15 quarters. Overtime, the next largest component, rose 12 points from last quarter. This increase in overtime could be an indicator that some segments are so unsure of the economy they are forcing overtime to avoid the hiring process - an expensive bet in the mid-term.
• The greatest competitive threat to printers remains largely unchanged from last quarter. The current economy (52%) is the largest threat, exceeding price pressures from lower cost competitors (19%), and emerging technology (11%).
• Print buyers place the greatest pricing pressure on ink to substrate printing (46%).
• Referrals (40%) continue to be the most popular way to find employees. Use of flexible staffing increased 5 points to 15%.

The Association of American Publishers (AAP) has published an report which says that in 2012, U.S. Trade publishers’ net revenues grew by 6.2 percent over 2011.

The data, based on numbers provided by 1,193 publishers, also notes the rapid growth of eBooks which now accounts for 22.55 percent of revenues compared to 16.98 percent in 2011 and just 3.17 percent in 2009. When the report started tracking eBook numbers in 2002, the number was at 0.05 percent.

In formats, Adult Fiction/Non-Fiction saw growth in eBooks, downloaded audiobooks and paperbacks while Children’s and Young Adult eBooks, hardcover and board books saw increases. The eBook format in the Religious Presses category also grew as compared to 2011.

According to a report by Publishers’ Weekly last fall, Canadian publishers reported that digital book sales were estimated to be 12 to 13 percent of the book market for 2012, up from the 12 to 13 percent figure of 2011.


According to a new study released by the Pew Research Center regarding news consumption trends, newsstand sales declined 16 percent for all major news magazines in the U.S. during 2012, with magazines overall declining 8.2 percent. While newspaper subscription revenues were steady, a major decline in print ad revenue continues.

Among the hardest hit were The Economist, which declined 17 percent and The Week, which declined 18 percent. Newsweek, which stopped publishing a print edition at the end of last year, dropped five percent. Print subscriptions were relatively stable, a fact which the study attributes to discounts and special offers. Of six magazines studied, ad pages declined 10 percent in 2012.

For newspapers, daily circulation fell 0.2 percent, a number that is buoyed by new digital pay plans implemented by 450 newspapers in the U.S. Advertising revenue numbers provided by the Newspaper Association of America indicates the industry has fallen below US$20 billion. For every $16 in print ad revenue lost, only $1 in digital ad revenue was recouped, a worsening trend from the $10 to $1 ratio witnessed in 2011. Newspaper ad revenues now sit at 60 percent of what they were a decade ago.

On the whole, magazine revenues declined 10.4 percent and newspapers declined 5.9 percent year over year, with Digital (online) and Local TV gaining 16.6 and 10.1 percent respectively.

Read the key findings of the media study here.

According to analysis by BookNet, sales of print books in Canada slipped nearly 10 percent in the third quarter this year compared to a year ago.

Unit sales slipped 9.5 percent while dollar value fell 6.4 percent. The numbers are based by the tracking of 665 retail locations across the country.

The break-down of the segments are as follows:

Total market (All):
Volume: -9.54% 
Value: -6.42%

Fiction (All):
Volume: -7.12%
Value: -0.31%

Non-Fiction (All):
Volume: -12.36%
Value: -13.06%

Juvenile (All):
Volume: -10.13%
Value: -6.03%


A recent study, also by Booknet, found that e-books were not entirely to blame, as over the first three quarters of 2012, it saw a decline from 17.55% of its 1,000 readers surveyed who purchased an e-book in the first quarter to 14.16% in the third quarter. 

BookNet is a non-profit organization founded in 2002 for the Canadian book industry.


According to Ad Age, a trade publication looking at the advertising world, subscriptions of digital magazines has doubled in the second half of 2011 compared to a year earlier.

Based on statistics from the Audit Bureau of Circulations, digital magazines are now estimated to have an audience of 3.29 million, compared to 1.46 million in 2010, a 125 percent increase. Even with the growth, digital circulation represents only about one percent of magazines' total paid and verified circulation.


Jonathan Franzen, acclaimed author of The Corrections and Freedom, made a statement in support of printed books while speaking at the Hay Festival in Cartagena, Colombia. In a report by The Telegraph, Franzen is quoted as saying "serious readers" opt for the paper edition over ebooks because they appreciate the permanence of physical books.

“The technology I like is the American paperback edition of Freedom. I can spill water on it and it would still work! So it's pretty good technology. And what’s more, it will work great 10 years from now. So no wonder the capitalists hate it. It’s a bad business model,” said Franzen.
 
He continues to say how a printed book conveys a sense of reassurance to the reader that they're holding on to a piece of time and space. 

Read the full story on The Telegraph's website.


Smithsonian.com, the Internet face of the venerable Smithsonian Institute, has published a short feature highlighting works of literature which no longer exist.

Writers such as Jane Austen and Ernest Hemmingway all had unpublished works which never saw the light of day. Others, such as Homer and Shakespeare have had works passed on to legend because of the lack of technology to reproduce the works in quantity.

In another instance an anonymous Franciscan monk from the 14th century wrote a travelogue of his journey to the arctic. Five copies were produced, but the knowledge only survives through a third-hand account of its contents.

View the full list here.


Canon, HP, Ricoh, Fujifilm and Xerox were among the top U.S. patent earners of 2009 in a ranking compiled by IFI Patent Intelligence. Canon placed fourth with 2,206 patents. HP ranked 10th with 1,273 patents, Ricoh ranked 15th with 988, Fujifilm ranked 19th with 880 and Xerox had 706 patents, ranking 28th. If the ranking were to include both Xerox and its Fuji Xerox venture, that number would be 1,331, placing it ninth.

Below are the top U.S. patent earners of 2009, as compiled by IFI Patent Intelligence, a firm specializing in patent databases:

Rank Company Name 2009 Patents
1 INTERNATIONAL BUSINESS MACHINES CORP 4914
2 SAMSUNG ELECTRONICS CO LTD KR 3611
3 MICROSOFT CORP 2906
4 CANON K K JP 2206
5 PANASONIC CORP JP (1) 1829
6 TOSHIBA CORP JP 1696
7 SONY CORP JP 1680
8 INTEL CORP 1537
9 SEIKO EPSON CORP JP 1330
10 HEWLETT-PACKARD DEVELOPMENT CO L P (2) 1273
11 FUJITSU LTD JP 1220
12 LG ELECTRONICS INC KR 1065
13 HITACHI LTD JP 1058
14 HON HAI PRECISION INDUSTRY CO LTD TW   995
15 RICOH CO LTD JP   988
16 GENERAL ELECTRIC CO   979
17 MICRON TECHNOLOGY INC   966
18 CISCO TECHNOLOGY INC   913
19 FUJIFILM CORP JP   880
20 HONDA MOTOR CO LTD JP   774
21 HDENSO CORP JP   745
22 SIEMENS AG DE   716
23 BROADCOM CORP   714
24 SHARP K K JP   657
25 HONEYWELL INTERNATIONAL INC   655
26 TEXAS INSTRUMENTS INC   652
27 NOKIA AB OY FI   648
28 XEROX CORP   624
29 INFINEON TECHNOLOGIES AG DE   605
30 LG DISPLAY CO LTD KR (3)   597
31 HYNIX SEMICONDUCTOR INC KR   587
32 SUN MICROSYSTEMS INC   561
33 SEMICONDUCTOR ENERGY LABORATORY CO LTD JP   545
34 BOEING CO THE   534
35 BROTHER KOGYO K K JP   532
35 MITSUBISHI DENKI K K JP   532
35 TOYOTA JIDOSHA K K JP   532
38 GM GLOBAL TECHNOLOGY OPERATIONS INC   531
39 NEC CORP JP   526
40 KONINKLIJKE PHILIPS ELECTRONICS N V NL   515
41 SILVERBROOK RESEARCH PTY LTD AU   474
42 BOSCH, ROBERT GMBH DE   467
43 AT&T INTELLECTUAL PROPERTY I L P   444
44 SANYO ELECTRIC CO LTD JP   443
45 FUJI XEROX CO LTD JP   425
46 SAMSUNG SDI CO LTD KR   423
47 ALCATEL-LUCENT USA INC   413
48 INDUSTRIAL TECHNOLOGY RESEARCH INSTITUTE TW   397
49 NEC ELECTRONICS CORP JP   391
50 HITACHI GLOBAL STORAGE TECHNOLOGIES NETHERLANDS B V   385

 


The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 percent. The record-low interest rate, now in place for the past several months, is scheduled to stay in this position until June 2010, provided the Bank of Canada’s inflation outlook does not change. As well, the Bank Rate remains unchanged at 1/2 percent.

In its statement, the Bank of Canada wrote: “While the outlook for global growth through 2010 and 2011 is somewhat stronger than the Bank had projected in its October Monetary Policy Report, the recovery continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”

The Bank projects that the Canadian economy will grow by 2.9 percent in 2010 and 3.5 percent in 2011, after contracting by 2.5 percent in 2009 – “The private sector should become the sole driver of domestic demand growth in 2011.”



The printing-research group PRIMIR released three studies covering the industry, including: Trends in Books: 2008-2012; Sustainable Print in a Dynamic Global Market; and Media Mix and the Impact on Print: 2003-2007-2012.



As a potential enticement to purchase the US$4,500 reports (each, for non-members), PRIMIR provided the following preview statistics (based primarily on U.S. data):

(The text below is taken directly from PRIMIR press releases.)

Trends in Books: 2008-2012


• Printed books reached the peak of their product life cycle with publishers' net sales of 3.3-billion book units in 2007.

• In 2008, six major industry segments in the book industry accounted for 3.0 billion publisher net book copies valued at US$35.7 billion.

• Printed books were headed toward a new record high in 2008 when the economic recession hit full force. 

Book content, in its present paper form, will continue to be a mainstay product through the 2009-2012 forecast period, but at reduced volume levels.

• Book content will morph from being primarily an ink-on-paper product to a multiple-media product distributed through a variety of channels.

Media Mix and the Impact on Print: 2003-2007-2012




• By the end of 2007, total U.S. media and marketing communications spending levels exceeded US$779 billion, with a 5-year compound annual growth rate of 2 percent.

• Advertising media spending accounted for only 32% of this total (above), with a softening of spending levels in 2007 and overall declines in 2008 and 2009.

• Non-media spending channels continued to grow at a 2% compound annual growth rate, fueled by steady investments in promotional programs.



• The study identifies six notable marketplace forces in relation to media and marketing communications spending through 2012, such as the growth in the 65+ population, adoption rates for Internet-enabled mobile devices; and global economy.

Sustainable Print in a Dynamic Global Market




• Conducted for PRIMIR by Pira International, the research revealed that few companies in the print industry who claim to be 'green' truly are.

• Most printers claim to be 'green' simply because they are FSC or SFI certified.

• The study revealed that the more progressive firms have a culture – an all-out corporate commitment to sustainability – with full time staff dedicated to that purpose.

• In 2006, the paper industry was the U.S.'s second largest user of electricity, with consumption of 75 billion kilowatt hours. On the other hand, data centers and servers were close behind, having consumed 61 billion kilowatt hours of electricity.





A report by the Institute of Supply Management concludes that United States manufacturing made a definitive swing back into growth during the last two months of 2009.

The organization, which represents a trade group of supply executives, reports that its manufacturing index rose to 55.9 in December, up from 53.6 in November. An index score of 50 indicates neither growth or decline.

The score represents the fastest pace for the index since April 2006 when the index scored 56. Eighteen industries reported to the index, of which nine reported growth. Of the ones which slipped, however, included wood products and printing. The printing industry in the U.S. did experience employment growth in December.

A report by JP Morgan's Global Manufacturing indicates that global manufacturing ended 2009 at a 44-month high, with employment also rising for the first time since March 2008.

Countering the news for manufacturing in Canada is the strength of the Canadian Dollar, which rose to a 4-month high of 96.41 cents on Monday, January 5, due to the rise of oil prices and a weakening U.S. dollar. Overall, the Canadian dollar rose 15.8 percent against the U.S. dollar in 2009.


flags
Economists were taken aback today as 43,200 Canadian jobs were shed in October, after two months of gains. United States' numbers also released this morning show that country’s unemployment rate surpassed 10 percent for the first time since 1983.

Canadian analysts, based on the two previous months of gains, had been predicting that around 10,000 new jobs would be created in October, but results released by Statistics Canada suggest companies are still unsure about economic turnaround. Including these October numbers, Canada has lost some 400,000 jobs over the past year as the country’s unemployment rate hit 8.6 percent.

According to Statistics Cananda, most of the unemployment loss targeted part-time workers, as well as adult women and youth. Rising self-employment numbers over the past year (3.9 percent) have propped up Canada's economy, while private employment has dropped by 4.1 percent over the past year and public-sector numbers have fallen by 1.6 percent.

The United States economy in October shed 190,000 jobs, according to the Labour Department. The Associated Press points out that these October numbers represent the 22nd straight month in which the U.S. economy has shed jobs – the longest on records dating back 70 years – and that nearly 16-million Americans cannot find jobs.

View The Globe and Mail's interactive map of 2009 unemployment rates, by province and city.







The Awl, an alternative news Website, has charted the circulation numbers of major U.S.-based newspapers – The Wall Street Journal, The New York Times, Los Angeles Times, The Daily News, Washington Post and The New York Post – going back to 1990.

Read The Awl’s story: A Graphical History of Newspaper Circulation Over the Last Two Decades

Read The Awl’s associated story: How are Newspapers Reporting on Newspaper Circulation

Below: The Awl circulation chart

The Awl

































































































As the Canadian dollar inches towards parity with its U.S. counterpart, the Bank of Canada announced today it will keep the interest rate at its current unprecedented low level for the near future.

While this is good news for consumers and domestic trade, it means that the dollar will likely stay high, reducing the attractiveness of Canadian exports on the world market.

“Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures,” the Bank of Canada said in a statement. “The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July.”

The key policy rate is expected to stay at 0.25 percent until June 2010.

The Bank will update its Monetary Policy Report on Thursday, which will detail its outlooks and projections on the economy.



A joint study by the Financial Post and the Canadian Federation of Independent Business has ranked the most business-friendly cities in Canada. This year, the second year of the study, had Saskatoon take the top position.

The Canadian Federation of Independent Business ranks cities by "policy, which encompasses tax and regulatory policies; presence, which reflects the concentration of entrepreneurs and business startups; and perspective, which gauges the optimism and success of actual small business owners."

Cities in Quebec also ranked favourably along with cities in Saskatchewan in the study while Toronto was dead last, at 96. Toronto suburbs fared better, leading the National Post to call Toronto the "bedroom community of the 905." Markham ranked 33rd on the list.

High municipal taxes are a major factor determining the friendliness of cities. Toronto has a property tax rate for businsses roughly 4.5 times that of a comparable residential whereas Saskatoon's rate is 1.75 times.


Read the Financial Post story here.

 

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