Industry Assessment
Printing and Graphic Arts Equipment
The printing and graphic arts equipment industry encompasses “a complex array of printing presses and related handling, converting, and other supporting production machinery, equipment and systems that are utilized throughout a wide range of commercial and specialty print production processes. Equipment utilized in prepress, press and post-press operations are all included (in this industrial category)… (industry) also encompasses additional peripheral non-lithographic processes and a variety of equipment-related controls, accessories, and software.” 1 The industry is largely classified under NAICS 333293.
The industry has a profound impact on our lives through its close association with the printing and publishing industry. From newspapers to radio and television broadcasting (indirectly), from books used in educational institutions and read for pleasure to periodicals used by government and the business community, from greeting cards to the labels that identify products and media for entertainment and countless more, the printing and publishing industry influences all aspects of our thoughts and activities. Without printing and graphics arts equipment to serve the printing and publishing industry, there would be no media, and our lives would be very different.
Industry Overview and Global Competitiveness
According to the 2002 Economic Census, the latest figures available, and confirmed by NPES – The Association for suppliers of Printing and Converting Technologies (the industry’s principal trade association), the U.S. Printing and Graphic Arts Equipment industry is composed of nearly 450 establishments with approximately 16,000 employees and an industry payroll of approximately $742 million. Companies range in size from under $1 million in annual sales to more than $1 billion in annual sales.
Estimates of those employed directly or indirectly employed in the printing and publishing industry exceed one million. Both the number of printing and graphic arts equipment establishments and the number of employees have been decreasing annually. The decreases are the result of both the consolidation trend in the industry and advances in technology that have led to increased productivity. Some segments of the industry have become very concentrated, with only a very few major firms remaining.
The value of product shipments for the printing and graphic arts equipment industry amounted to $2,935 million in 2006, a 2.9 percent decline from $3,025 million in 2005 (latest available Census data). Recently, foreign demand for U.S.-made printing and graphic arts equipment has been considerably stronger than U.S. domestic demand. U.S. exports increased 7.8 percent in 2008, compared to 2007, while U.S. sales of printing and graphic arts equipment, as reported by NPES, declined significantly in 2007 and 2008. The declines are linked largely to declining newspaper readership and, more recently, the weakening U.S. economy.
In 2008, U.S. exports of printing and graphic equipment were valued at $1,137 million, an increase of 9 percent compared to 2007. The top five export markets for U.S. printing and graphic arts equipment were Canada ($124 million), Germany ($89 million), Mexico ($73 million), Brazil ($68 million) and China ($59 million). U.S. exporters registered significant increases to a number of countries including Brazil, Switzerland, India, Colombia, Israel, Argentina, Peru and Indonesia.
On a regional basis, exports increased 41 percent to Latin American countries while exports to the European Union and Asian countries declined 5 percent and 10 percent, respectively. Within Asia, exports to the ASEAN countries increased 60 percent. Exports to the Middle East and Eastern Europe, although relatively small, also registered strong increases. Poland, in particular, is a market that the industry is looking at very closely. U.S. imports of printing and graphic arts equipment were valued at $1,661 million in 2008, a 12 percent decline compared to 2007. Weak U.S. demand and favorable dollar exchange rates that made U.S. products more competitive were major reasons for the decrease.
Major foreign competition comes from German manufacturers. Imports from Germany, however, have dropped significantly in recent years. In 2008, imports from Germany were valued at $690 million, down from $980 million in 2006. Other countries with large shares of the U.S. import market include: Japan ($249 million); Switzerland ($122 million); Israel ($109 million); and Italy ($98 million).
As to the future, Ralph Nappi, NPES President, put it in perspective as part of his remarks in an article in Advertising Age. “There are substantial opportunities that exist in ‘printing’ if we recognize our future business opportunities are more than just ink and toner on paper, and today’s customer as more than just a commercial printer. Where Goss, Structural Graphics, E-Ink Company, GE and others see opportunities is in an area that allows core competencies to be leveraged for much more – and greater impact – than they used to be. Our future lies in new opportunities, beyond the limits of what we currently see through traditional ‘printing spectrum’ goggles – the convergence of message and media; of marketing and print; of manufacturing and innovation – yet they are there, just over the horizon.”
