Ronnie H. Davis, Ph.D., Senior Vice President and Chief Economist, Center for Print Economics and Management, Printing Industries of America
What will 2018 bring for the economy and print?
At press time, the fate of tax reform was still being debated, but the view the next year or so is becom- ing clearer in terms of overall macroeconomic and business environment, the trend for aggregate 2018 print sales, fundamental micro-market developments in print, and a checklist for competitive advantage in 2018. A detailed 2018 outlook will be provided in a Flash report once the final version of tax reform is established.
The 2018 Overall Macroeconomic and
Business Environment Our current view is that the expected corporate
tax reform will add significant bounce to an already accelerating economy as a result of deregulation and the added strength of the global economy. The triple forces of tax reform, deregulation, and
global tailwinds should keep the American economy robust over the next 12 months. We expect real or inflation-adjusted growth to equal or exceed 3 percent for each quarter. To grow at such a sustained pace, the economy needs additional labor and capital. The capital injection will come from a lower corporate tax rate plus a territorial tax basis, allowing transfer of foreign earnings patriated back to the United States. The increase in labor supply should come from an elastic response to more job openings and higher wages.
The Magazine 4
What's Ahead for the Economy and Print
The Trend for Aggregate 2018 Print Sales For 2018, print sales should increase at a relatively
robust pace, but slightly below the overall rate of economic growth or in the range of 1.5 to 2.5 percent. This velocity would align with print’s tendency to perform best in a mature recovery phase of the business cycle.
Fundamental Micro-Market Trends Within this overall sales pattern there will be some
key micro-trends. These include: Print can be very profitable—Although the
economy and overall print trends are important, historically some printers always outperform others. PIA’s Dynamic Ratios program indicates that the 25 percent of printers that achieve profit-leading rankings do so consistently. Achieving high profits is not a random occurrence but is achieved from strategic and operational excellence. Print can be a fast growth industry—Although print
is generally a mature, stable industry there are sectors that are fast growing. In terms of print processes, there are three fast-growth opportunities: • Inkjet, both wide format and production • Wide-format digital and inkjet • Digital toner based
These print market segments will likely grow at
relatively higher rates than other sectors: • Packaging and specialty packaging • Labels and wrappers
Forecast | 2018
INDUSTRY INSIGHTS
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