Dr Joe's Printing Industry Blog

Printing shipments in October were up a strong +$259 million on a current dollar basis, and up +$155 on an inflation-adjusted basis. Real printing shipments have been up three consecutive months.

An increase of this size has not been seen since July 2004, when real shipments were up +$206 million. September's shipments were revised down -$21 million on a current dollar basis.

For the year, real shipments are now slightly better than last year; it had been negative until October.

The increase may be due to the highly contentious local political races, where print was considered more effective than new media, since local digital media does not have the presence nor the interest among Internet users that global, national, and topical web sites attract.

The first two months of the most important quarter for printing are up +$436 million compared to last year, and +$170 on a real basis. While some print categories, such as magazines, are still having problems, it is clear that other sectors are now picking up the slack. Direct mail probably had a good run because of the political advertising, especially.

Some historical stuff:

• The last year there was a full year of months with real increases compared to the prior year was 1995.
• The last time we had three months of consecutive real increases was actually a four-month run from May to August 2000.
• The biggest one-month rise compared to a prior year (our data only go back to 1993) was +$897 million in December 1995.
• The biggest one-month decrease compared to a prior year was September 2001's -$1.5 billion. No one should assume that was the result of 9/11. Every month of 2001 prior to that had a real decline averaging -$557 million. 9/11 didn't help, but the industry had declined 12 consecutive months before that.
  

Now here's the question: why are print shipments going up with weak GDP, just like the regression models I've been running said that they would? Because, I guess, they are. But to speculate, not everything can be done electronically, and digital media are concentrated in some big properties, like Yahoo!, AOL!, and a few others. It's still a very concentrated business. They have been able to raise their prices. Also, there is an understanding that multiple media are more effective than just one, so print gets a share. Remember, strong economic growth creates investment dollars in communications technologies that make avoiding print easier. We may be picking up a billion dollars or so of print that is not being imported, especially from Canada. We're still reviewing those data.

Is this the bottom of the market? I am not bullish in the long term as broadband is still growing and more really cool gadgets with more reliable connectivity are on the horizon. They're not just staying on the horizon... they're starting to march toward us. Let us not forget that for the past 13 years, the average change in monthly printing shipments is actually a decline of -$155 million. One has to wonder if the bulge in political printing that we got this time was actually a last gasp of large scale local political printing. The national elections of 2008 will have coattails that local and state elections can ride, and then the next local-only elections are 2010. I suspect that local Internet and digital media will be in a quite different position at that time than they were this past November.