Economic growth data released today by the Australian Bureau of Statistics (ABS) for the December 2012 quarter shows that the printing industry surged ahead during the quarter to record the highest rate of growth amongst the manufacturing sectors.
The buoyant performance also placed the printing industry amongst the most rapid growth sectors of the Australian economy with only the mining and resources and utilities sector reporting superior outcomes.
However profit margins were down by a whopping two thirds, capital investment was at its lowest level since Q2 1991, and gross value add remains almost 17 per cent below pre-GFC levels.
The ABS data shows that the printing industry registered solid growth rate of 5.7 per cent during the December 2012 quarter, the third consecutive increase, to register a growth rate of 14 per cent during the year to December. The industry's total gross value added defined as its contribution to the Australian economy totaled some $3.99bn during the year to December.
The December quarter economic growth outcome represented the highest outcome in four years.
Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, said while the growth figures are very encouraging they do need to be placed in a proper perspective.
"We certainly have some impressive numbers to boast about and this is good for the industry. However, we need to consider that the data covers a time in the past and industry as a whole is still trading considerably below Global Financial Crisis (GFC) levels. The full year result to December is still down by 1.9 per cent, and based on my analysis with the industry's gross value added remaining 16.8 per cent lower compared to the pre-GFC period," he said.
"While we know that some of that activity has been permanently lost to the industry due to industry structural issues including the migration of printed matter to e-platforms, the latest economic growth data confirms that the printing industry is showing signs of revival".
Tchamkertenian reported that during the past week a number of key industry indicators released by the ABS also point to an upward movement in some areas.
He says, "Printing industry sales for instance also improved during the quarter by 4.1 per cent, up by 8.9 per cent on the same period a year earlier. Sales have now been increasing for three consecutive quarters and surpassed the $7.3bn level for the year to December."
While industry growth and sales figures were impressive, Tchamkertenian said that weaknesses still existed in new capital expenditure and profits.
"New investments fell by 4.7 per cent during the December quarter and were down by 42.3 per cent compared to the same period a year earlier. During the year to December total new investments stood at just $181m, their lowest level since June quarter 1991.
"While the capital expenditure figures look bleak they too need to be placed in perspective. With industry consolidation efforts continuing, it is likely that more and more printing businesses are acquiring used or second hand assets which obviously impacts on new investment levels.
"So by just focusing on new investment data and not factoring total investments, which include used machinery and equipment, a somewhat distorted picture can emerge.
"There is no doubt that as the industry consolidates further and as industry participants deal with the idle capacity issue, new capital investment data will continue to be affected for some time to come," he said.
Another area of key industry data under pressure is profitability or industry margins, which declined by a noticeable 17.5 per cent during the quarter, and was reported to have declined by 66.4 per cent on the same period a year earlier.
"Profitability data shows six consecutive quarters of falls. The latest quarter outcome is almost at a four year low. This confirms that industry margins are still being subjected to intense pressure," Tchamkertenian said.
He said that while the Australian economy continued to grow, the rate of growth in trend terms at 0.6 per cent during the quarter was the weakest since March quarter 2011. As a consequence, the annual rate of growth fell from 3.4 per cent to 2.9 per cent.
Contributing to growth during the latest quarter were household expenditure, public investment and net exports. General government expenditure and non-dwelling construction detracted from economic growth during the December quarter.
At an industry sector level mining, utilities, wholesale trade, financial and insurance services, and health care and social services contributed to economic growth, while agriculture, forestry and fishing detracted from growth.
The breakdown of the data at the state and territory level shows that in trend terms Northern Territory, Western Australia, New South Wales, Queensland, and the Australian Capital Territory all expanded; while Victoria, South Australia and Tasmania contracted during the year to December.
"It is interesting to note that while the rate of growth of the economy is showing signs of slowing down in trend terms, the growth rate in the printing industry remained solid. There are various reasons for this development. Print remains an effective communication medium and it could herald a return to the medium as economic conditions become a bit more challenging.
There is also the statistical effect that as the printing sector starts recovering some lost ground from the lows it reached during the post-GFC period, the current increases by their nature will appear more significant due to the effect of the recovery taking place from a much lower activity base.
Having provided some possible explanations to the latest economic growth numbers, you cannot mask the fact that there are clear signs that the printing industry may once again be re-emerging from its recent lows, which is a very welcome development," Tchamkertenian said.
