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Seventh drupa Global Trends Report captures printing industry just before COVID-19 impact

Scheduled to be published at the end of this month, the 7^th drupa Global Trends Report offers a snapshot of the global printing industry just before the COVID-19 pandemic began to wreak havoc.

The results, from a survey conducted before the coronavirus outbreak and the subsequent postponement of drupa to April 2021, showed a global industry that remained positive, but reflected more challenging global economic conditions.

Packaging and functional market sectors are better placed than publishing and commercial, it pointed out. North America remains dynamic, while confidence tends to decline in Europe and all other regions. Developing regions are held back by concerns about political instability and corruption, while developed regions are nervous about an inevitable cyclical economic downturn. There’s constant pressure on margins, but increasingly, the better-positioned companies counter this by continual innovation. Investment plans remain strong, as printers and suppliers all recognize the need to remain competitive.

These results come from drupa’s 7th major annual survey, which was answered by the drupa Expert Panel last November. The panel consisted of drupa 2016 exhibitors and visitors with decision-making authority. The survey was conducted by Printfuture (UK) and Wissler & Partner (CH). Almost 600 printers and 200 suppliers participated, providing a representative picture of all regions worldwide.

DIVERSIFICATION IS KEY

Globally, 17% more printers described their company’s economic condition as “good” compared with those who described it as “bad.” The difference was even more pronounced among machinery manufacturers and suppliers, with +32%. However, a clear trend can also be seen. For example, after the slow recovery following the recession of 2007/2008, confidence peaked in 2017 and has been developing only cautiously since then. As always, the framework conditions of the individual markets and different regions vary greatly. The packaging market is the most successful, followed by functional, commercial and publishing printing in the order mentioned. In fact, a growing number of commercial and publishing printers are trying to diversify into the other two markets. The financial figures confirm this trend, with margins struggling in all market sectors.

However, the active decline in sales is most evident in publishing. Since the industry surveys began in 2013, North America has remained a dynamic market. In Europe, confidence rose until 2018, but has since declined, while all other regions have seen a decline. The success of machinery manufacturers/suppliers depends on the success of their customers, both regionally and market-specifically. However, in many cases, they benefit from serving a broader range of markets and regions.

THE IMPORTANCE OF INNOVATION

For several years, printers have responded to the constant pressure on margins by increasing turnover and keeping costs to a minimum. “Increasingly, we are seeing clear evidence that while cost-reducing steps will continue, printers are recognizing the need to innovate – by launching new products and services in their existing markets or by entering new markets,” said Sabine Geldermann, director of drupa and global head of print technologies at tradeshow organizer Messe Düsseldorf. “Investment plans therefore remain in place. In addition, more printers in all regions report that they will even increase their capital expenditure in the coming year instead of reducing it. This commitment to increasing investment applies to all markets, but is again most pronounced in packaging, followed by functional, commercial and publishing printing.”

Most of the investments will be in finishing, followed by printing technology and prepress/workflow/print management. While the individual investment projects in the finishing segment are very diverse, more specific statements can be made in the area of printing technology. The most popular is toner-based colour digital printing with single-sheet feeding. It’s followed by sheetfed offset printing, although there are significant fluctuations between the markets.

BROADER PATTERNS IDENTIFIED

Richard Gray, operations director at Printfuture, added: “For the first time, we asked specifically about the broader socio-economic pressures, and there were two clear patterns reported across the globe. For the developed regions the focus was concern about the risk of, or reality of, economic recession in the country or region, followed by concern about global trade wars and the impact of global warming/environmental pressures. For the developing regions, it was corruption and political instability creating economic recession that dominated. Clearly, we must now add the impact of the coronavirus, a concern for all which, however, is not yet represented by the report.”

The industry coped with the last severe recession and will cope well enough with a global slowdown, drupa said, even though now it will be exaggerated by the impact of the coronavirus. “The crucial difference is that, in most markets, the industry has adapted their business models to the challenge of digital communications,” the report said. “Investment is the key to keeping ahead of the curve.”