"If the economy recovers as expected, print sales will grow 1.0% to 2.5% this year and as much as 4.1% next year," said Andrew Paparozzi, vice president and chief economist of the National Association for Printing Leadership (NAPL). "[But] sales volumes robust enough to restore pricing power and profits—the hallmarks of real recovery—may have to wait until 2005."
Before a general session at the GATF/PIA, NAPL Sheetfed Pressroom Conference in Chicago earlier this month, Paparozzi highlighted several economic indicators that show the economy is healing slowly.
Paparozzi said the war in Iraq had little effect on the recovery as "the gross domestic product has now grown for six consecutive quarters—sometimes vigorously."
He cautioned, however, the recovery was too narrow. While consumer spending for motor vehicles and housing has been healthy, other sectors are still weak, including capital investment, exports, and manufacturing, Paparozzi said.
Paparozzi expects gross domestic product to grow at a rate of 2.3% for 2003 and 3.6% for 2004, its fastest rate in four years, beginning midyear. Paparozzi, stressed the recovery will not benefit all printers, but only those who recognize that "they are in the communications business, not the ink-on-paper business. The way people communicate is changing profoundly—printers have to recognize that and become a part of it.
"Economic recovery isn't going to make everything right again," he said. "Printers' clients have new communications options and preferences. For those who remember that, the opportunities are historic. For those who forget it, recovery isn't going to look very different from recession.
"Printers who participate in the expected economic upturn will not be companies of a particular size or equipment configuration or location or those offering a specific product. Rather, they will be the companies that are best prepared to take on an expanded role in filling their customers' changing communications needs," Paparozzi said.