There has been a lot of anecdotal evidence and some reporting of national printing organisations on how the industry fared during lockdown. Official statistical data is now trickling in as well, to gauge the drop in print production during lockdown and the extent of recovery since. Eurostat published monthly production index data up to July to provide a Europe-wide overview.
The production index is based on 2015 volumes as a base year and tracks the monthly output compared to that year. Print & reproduction covers most of the graphic arts industry, but part of label & packaging and all in-house print, copy shop and data centre print is missing. Crucially, it tracks production volume, not revenues. While many high volumes applications lost, more targeted print, as e.g. achieved with inkjet, is likely to have fared better. Still this is the best Europe-wide short-term indicator available.
Like the total of manufacturing the EU production index for printing & reproduction dropped by about 30% compared to pre-Corona levels. The main difference is that manufacturing output scored several points higher pre-Corona, while printing output ranked lower compared 2015, confirming that print lost some ground in recent years. Paper production remained surprisingly stable in April, but this could be caused by increases in tissue production, to make up toilet paper shortages during the lockdown.
After reaching the bottom in April, production volumes started to recover. For all manufacturing and printing & reproduction the July values are still 8% or 10% respectively below the pre-Corona level. While the speed of recovery slowed down in July it is likely that August will bring more gains (before wondering too much – the data has been adjusted for seasonality).
Before speculating on the level of the recovery the restrictions of the second Covid wave need to be kept in mind. While all governments strive to avoid wide-ranging lockdowns as in March and April, measures some countries are already taking will impact printing activities again. Hopes of a quick revival of travel, hospitality and event industries have been dashed and walk-up sites (copy shops, quick printers) will face restrictions as well. At least for some countries this could mean another dent in the production index.
At the beginning of the Corona crisis there were assumptions on which products would benefit or drop during lockdown and in the aftermath. The reality did not prove all predictions right.
Office related print (business cards, stationery, presentations, …), with about 10% of the commercial print volume a sizeable segment, did drop as expected. Working from home, less events and less business activity took their toll. It is likely that the segment will post a 10% decline in volumes by the end of the year.
Promotional printing took a hit as well, as expected. With businesses closing down and the crucial event, hospitality and travel sectors not recovering yet the demand for advertising materials will be down. Flyers, as more short term collaterals, suffered more than brochures, which are still necessary to kick off some longer term sales processes or build brand. What surprised many is that direct mail and catalog were down by as much as 20% in the lockdown. Expectations were that DM and catalogs would be a more welcome diversion during lockdown, looked at and shared more often. Research actually proved all this to be the case. However, marketers did slash their budgets to cut losses or re-funnel funds into e-enablement (shops, sites, advertising) to cope with the rapid increase in online activity. DM and catalogs should recover, but much will depend on marketers willing to step up ad spending again and producers demonstrating how well both media are received by customers. More targeting and personalization – as demonstrated with color inkjet – should be important drivers to get a better ROI and make the most out of the ad budget spent.
Newspapers and magazines were also expected to do better. Interest in news (and entertainment) was high during the height of the crisis. In some countries the circulation was even up initially, but the lockdown meant the sales were hampered a lot. Some rebound did happen after newsstands and other outlets opened again, but overall, 2020 will see lower circulation.
Book volumes held up well, although closures of bookshops meant that sales in March and April were down compared to 2019. But sales rebounded and the gap is closing rapidly while a mass move to e-readers did not happen either. Not all books fared well, with travel and some business books being down, while children’s books and DIY guides did particularly well.
The one segment that did improve was transaction print. With many notifications sent out by companies and governments volumes remained high. Volumes are expected to drop again as the situation settles and the push for electronic documents continues.
There were some applications that did very well. Games, puzzles, activity sets, coloring books… – all posted gains in volumes – as did all kind of print applications to keep kids busy. Decorative print increased due to adults trying to keep busy in turn. New applications sprung up as well, such as: printed face masks, antimicrobial coatings and health related prints (distancing signs).
Business patterns and consumer behavior were surely greatly influenced by the Corona crisis and lockdown. Some of the changes will stay. The Corona pandemic acted as a catalyst for some behavior changes already happening, such as online transactions and cashless payments. Many habits will revert however, at least to some extent. Even online buying peaked for the time being and transaction revenues dropped again. There is no room for complacency, however. Printers need to take action and adapt to the new realities and serve customers in their new business situations. Print volumes are down and are not likely to recover fully. Instead value-added applications will become more important to keep revenues, together with shorter runs, more flexibility and shorter lead times. This will tilt the balance even further towards inkjet. Additionally, production inkjet can bridge the gap from commercial print into label and packaging print, which did well in the crisis. Even if many habits and markets rebound, the best opportunities for growth are in changes.