1313thth
Forum of Asian Pacific Graphic ArtsForum of Asian Pacific Graphic Arts
1
FAPGA
AUSTRALIA COUNTRY REPORT
February ...
•Printing Industry growth has
been extremely volatile over
the past decade
• During the past decade the
industry has exper...
•During the GFC the rate
increased but government
intervention via fiscal stimulus
packages and supportive
monetary policy...
•Headline inflation
plummeted during
December 2012 quarter
• Headline rate remains
below RBA’s upper target
range of 3 per...
• The gap between private
and public sector wages has
been eliminated
• The All sector index has
started to trend down
• F...
•Retail trade is an important
driver of activity for the
printing industry
• The post GFC period has
been soft
• The last ...
•The Australian dollar has
been a star performer in
the post GFC period
• Significant appreciation
recorded against major
...
• Moving towards lower carbon economy - the Carbon Tax/Emissions Trading Scheme is
now in operation for 8 months
• Ageing ...
• When all the components of the “broader” industry are included, the pulp, paper, printing
and publishing industry is a s...
• A breakdown of printing
industry shows that it is
concentrated in the east-
coast
• The 3 main states of NSW,
Victoria a...
•The printing industry is
showing signs that it has
started to recover from the
GFC
• It remains doubtful
whether sales wi...
•New capital expenditure
has been very weak in
recent quarters
• Investments were brought
forward to access the
government...
• Trade in printed matter
has been trending
downwards in recent
months
• Appreciating Australian
dollar has not yet caused...
•In revenue terms some traditional media are growing and are forecast to continue to grow
•However because the growth rate...
•Printing Industries
Association of Australia
internal research shows
business confidence
remaining positive but
trending ...
• The most recent survey
results show increased idle
capacity
• Approximately 52 per
cent of survey
respondents reported t...
• Capital expenditure
intentions over the six months
to June 2013 have weakened
significantly
• The fall in intentions
cor...
•Selling prices were
reported to have fallen
once again on net
balance basis during the
December 2012 quarter
• The latest...
•Our survey shows the
great reported volatility in
net profits of the past have
given way to sustained
downward reported
m...
•After peaking in the
December 2008 quarter,
material costs started
trending downwards
• The recent period has
been associ...
•The other major cost factor
wages was trending up until
the most recent quarter that
of December 2012
•The moderation in ...
•Finance availability
started to deteriorate in
March quarter 2008 and
continues to this day
• Labour availability
increas...
• The economic
performance of commercial
printing – established
sector versus digital
printing – emerging sector
• On all ...
• The economic
performance of commercial
printing – established
sector versus digital
printing – emerging sector
• On a ra...
Economic Trends – AustralianEconomic Trends – Australian
PrintingPrinting
• One key economic
measure that digital
printing...
Red Issues:
• Price competition
• Commoditisation of print
• Idle capacity
• Price competition from imported
print
• Shift...
1313thth
Forum of Asian Pacific Graphic ArtsForum of Asian Pacific Graphic Arts
27
FAPGA
AUSTRALIA COUNTRY REPORT
February...
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Asian pacific graphic arts 2013 australian presentation - state of the printing industry

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Provides a critical overview of the economic state of the Australian printing industry by industry guru and commentator Hagop Tchamkertenian.

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Asian pacific graphic arts 2013 australian presentation - state of the printing industry

  1. 1. 1313thth Forum of Asian Pacific Graphic ArtsForum of Asian Pacific Graphic Arts 1 FAPGA AUSTRALIA COUNTRY REPORT February –March 2013 | IndiaFebruary –March 2013 | India Economic Trends Prepared by: Hagop Tchamkertenian National Manager for Policy & Government Affairs Printing Industries Association of Australia
  2. 2. •Printing Industry growth has been extremely volatile over the past decade • During the past decade the industry has experienced 5 economic downturns • The only time the Australian economy came close to a recession was during the period of the GFC • 24.0 per cent printing industry contraction reported during the GFC Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  3. 3. •During the GFC the rate increased but government intervention via fiscal stimulus packages and supportive monetary policy prevented it from rising to higher levels • Recent period shows a slight upward trend • While at 5.4 per cent it remains the envy of the industrialised world it does pose some policy challenges Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  4. 4. •Headline inflation plummeted during December 2012 quarter • Headline rate remains below RBA’s upper target range of 3 per cent • Underlying inflation is at the lower end of RBA’s inflation target band of 2-3 per cent Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  5. 5. • The gap between private and public sector wages has been eliminated • The All sector index has started to trend down • For printing businesses labour costs are the second highest cost component after material costs • With unemployment remaining relatively low any increased demand for labour will exert upward pressures on wages Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  6. 6. •Retail trade is an important driver of activity for the printing industry • The post GFC period has been soft • The last 6 months have been very weak due to consumers repaying off debt and continued uncertainty about economic prospects Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  7. 7. •The Australian dollar has been a star performer in the post GFC period • Significant appreciation recorded against major international currencies • Being a commodity based currency it has benefited from the commodity boom • Positives and negatives for the printing industry from a stronger exchange rate Economic Trends - AustraliaEconomic Trends - Australia FAPGA
  8. 8. • Moving towards lower carbon economy - the Carbon Tax/Emissions Trading Scheme is now in operation for 8 months • Ageing population – future labour supply issues, taxation and pension expenditure • Moving people into productive work opportunities – almost 800,000 people are currently on disability pension • Post GFC period characterised by subdued consumption expenditure – consumers are reducing their debts and are reluctant to spend big due to an increasingly uncertain economic environment • Two speed and sometimes three speed economy • Danger of wasting the proceeds of the “resources boom” • High Australian dollar hurting export and import competing sectors • Headline and underlying inflation under control may help moderate wages Economic Issues FacingEconomic Issues Facing AustraliaAustralia FAPGA
  9. 9. • When all the components of the “broader” industry are included, the pulp, paper, printing and publishing industry is a significant contributor to the Australian economy. Economic Profile – AustralianEconomic Profile – Australian PrintingPrinting FAPGA
  10. 10. • A breakdown of printing industry shows that it is concentrated in the east- coast • The 3 main states of NSW, Victoria and Qld account for 89 per cent of industry sales, employ 86 per cent of the workforce and pay 86 per cent of the wages and salaries Economic Profile – AustralianEconomic Profile – Australian PrintingPrinting FAPGA
  11. 11. •The printing industry is showing signs that it has started to recover from the GFC • It remains doubtful whether sales will ever recover to pre-GFC levels anytime soon • Sales have now increased for successive quarters Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  12. 12. •New capital expenditure has been very weak in recent quarters • Investments were brought forward to access the government’s investment allowance during the GFC • June and September 2009 quarters surge due to the investment allowance • March to September 2011 quarters outcomes mostly due to bounce back effect from low point Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  13. 13. • Trade in printed matter has been trending downwards in recent months • Appreciating Australian dollar has not yet caused a surge in imports of printed matter • Structural issues likely the cause – demand for printed matter has not yet recovered to pre-GFC levels • Unlikely that it would either in the short term Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  14. 14. •In revenue terms some traditional media are growing and are forecast to continue to grow •However because the growth rate is much lower than “emerging media”, their share of total advertising expenditure continues to fall •Printing businesses that rely purely on traditional forms of media face weak growth prospects •Those targeting all media have good growth prospects Economic Trends – AustralianEconomic Trends – Australian MediaMedia Source: PWC FAPGA
  15. 15. •Printing Industries Association of Australia internal research shows business confidence remaining positive but trending down • However compared to same period a year earlier, confidence levels are noticeably lower • The GFC impact is also clearly evident in the chart Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  16. 16. • The most recent survey results show increased idle capacity • Approximately 52 per cent of survey respondents reported to be operating at capacity levels of 70 per cent or more • The presence of idle capacity is another reason for the weak investment outcome and outlook Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  17. 17. • Capital expenditure intentions over the six months to June 2013 have weakened significantly • The fall in intentions correlates with the reported fall in capacity utilisation rates Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  18. 18. •Selling prices were reported to have fallen once again on net balance basis during the December 2012 quarter • The latest reported fall represents the 48th consecutive fall! • The outlook is for further modest falls Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  19. 19. •Our survey shows the great reported volatility in net profits of the past have given way to sustained downward reported movements in recent times • Very few net balance increases reported during the past decade • During the GFC period significant margin pressures experienced • The intensity may have slightly moderated but the trend is a downward one Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  20. 20. •After peaking in the December 2008 quarter, material costs started trending downwards • The recent period has been associated with increased cost pressures but the latest quarter shows further moderation • Given the reported reductions in selling prices, any reported moderation in material costs is a welcome development Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  21. 21. •The other major cost factor wages was trending up until the most recent quarter that of December 2012 •The moderation in the latest quarter may partly due to ongoing industry rationalisation/consolidation which is helping up free skilled workers Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  22. 22. •Finance availability started to deteriorate in March quarter 2008 and continues to this day • Labour availability increased during the period of the GFC but over the past 12 quarters modest net balance falls have been reported Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  23. 23. • The economic performance of commercial printing – established sector versus digital printing – emerging sector • On all key economic measures, digital printing sector has outperformed the commercial printing sector • Most of the new investment is also taking place in the digital printing sector Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  24. 24. • The economic performance of commercial printing – established sector versus digital printing – emerging sector • On a range of key economic measures, digital printing sector has outperformed the commercial printing sector • Most of the new investment is also taking place in the digital printing sector Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting FAPGA
  25. 25. Economic Trends – AustralianEconomic Trends – Australian PrintingPrinting • One key economic measure that digital printing sector has not outperformed the commercial printing sector is in capacity utilisation • Digital printing sector continues to report lower capacity utilisation levels FAPGA
  26. 26. Red Issues: • Price competition • Commoditisation of print • Idle capacity • Price competition from imported print • Shift from hard copy to soft copy • Reduced volumes • Poor cash flow management • Increased bad debts • Lack of management skills • Industry cooperation and trust Issues Facing AustralianIssues Facing Australian PrintingPrinting Green Issues: • Lack of investment in training • Pace of technological change Orange Issues: • Environmental perceptions of industry • Lack of government support • Volatile sales • Poor image of industry amongst school leavers • Ageing population • Lack of succession planning • Increasing operational costs – energy • Accessing finance • Difficulties in attracting and training apprentices • Moving beyond “ink on paper” FAPGA
  27. 27. 1313thth Forum of Asian Pacific Graphic ArtsForum of Asian Pacific Graphic Arts 27 FAPGA AUSTRALIA COUNTRY REPORT February – March 2013 | IndiaFebruary – March 2013 | India Thank you…. ありがとうございます。 감사합니다 बहुत बहुत शुक्रियाक्रिया

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