The UK printing and printing and packaging industry hit a record low in the second quarter of 2020, but it is expected to improve in the third quarter.
BPIF’s latest printing outlook is a quarterly industry health study that highlights the devastating impact of the coronavirus pandemic on the printing industry and shows that the UK is in recession. From April 2020 to June 2020, the economy shrank by 20.4% from three months a year ago, the first time since 2009.
Although the outbreak of novel coronavirus pneumonia broke out at the end of the first quarter, BPIF’s report found that the second quarter was the most affected, with production and orders at the lowest level since the survey record, although it is consistent with the first quarter forecast.
The survey found that in the second quarter of 2020, only 15% of printers increased their output level, 11% maintained a stable output level, and the remaining 74% said they were adversely affected by the decline in output.
However, expectations for the third quarter suggest that there may be some improvement, at least compared with the second quarter, but will not return to the normal state before coronavirus infection. 36% of companies expect output growth to increase in the third quarter, 35% expect production to remain stable, and 29% expect production to decline.
The study found that the government’s coronavirus support programs, especially the job retention program, are critical for many who have already obtained them, but a real concern for those who are still waiting for loan applications to be approved.
Many of the interviewees mentioned the uncertainty and the difficulty of introducing sales and orders into the enterprise, but some also gave positive comments on areas where the customer’s industry has improved or where the customer has started to move back.
75% of respondents believe that, so far, coping with the economic impact of the pandemic remains the most important business issue. “Maintenance of major customers” (37%) and “overdue payments of customers” (35%) are the second and third issues of concern respectively.
One respondent commented: “the biggest problem is that business predictability has disappeared. Everything we’ve learned, everything we’ve learned, is now gone, because retail trends, workload cycles, and business security are completely disrupted.
Compared with may, the overall capacity utilization rate in July was much higher. At present, the capacity utilization rate of 30% of companies was lower than 50%, which was lower than the level reported by 51% companies in May. The most common capacity level in July was 60-69%, which was chosen by 24% of respondents.
Among other things, 43% of respondents said they would like to see the government extend the coronavirus employment retention program (cjrs), while 39% said they did not seek any further measures to help meet the financial challenges facing businesses.
“We see a strong pick-up in demand (after the lifting of the blockade), but from a very low starting point, and while demand will pick up quickly to a point, a longer recovery obviously takes time,” said Charles jarrold, BPIF chief executive. I think the more government recognizes and supports companies, the less impact it will have on restructuring and the industry as a whole – although it is very difficult because of the financial situation of the business. “
“Companies that increase production levels in the second quarter are usually in the packaging industry, where companies large and small are actually very busy,” he added
“On the business side, we’ve seen some companies make really innovative changes, such as the use of personal protective equipment, which undoubtedly helps them, but there has been a really significant decline in demand in the field of commercial printing.”
In the second quarter, there was a slight increase in the number of printing and packaging companies in serious financial distress, while the number of those in serious financial distress also increased. At the same time, the overall employment rate fell in the second quarter as fewer companies recruited and more companies lowered their employment levels.
The total number of employees employed by the printing industry reached 8.77 billion on the day of 2020.
Post time: Sep-11-2020