Print and related industries proving to be a resilient sector in transition

The UK economy officially came out of recession earlier this year, but business confidence fell back in the third quarter of 2010 with growth forecasts for the economy distinctly cool for the rest of the year.

The Grant Thornton Business Confidence Monitor for the third quarter of 2010 suggests that the economy is running at more than 4 per cent below pre-recession levels with a fast return to growth by no means guaranteed.

This is a far from supportive context for the printing and related sectors where over-capacity, delocalisation and the import of printed products from low-cost countries, have increased dramatically.

The consequences of these developments for the trading and financial performance of companies in the print and related sectors, and further reductions in the workforce, continue to be a cause of concern for the sector in the UK.

The International Confederation for Printing and Allied Industries (Intergraf) reports that the production of the printing industry in Europe fell by 11 per cent between the beginning of 2008 and the middle of 2009.

In the UK, employee numbers have fallen by around 20 per cent in the last five years and the number of companies operating in the sector has decreased by 15 per cent.

Notwithstanding this dramatic decline, the sector remains an important element of the UK economy.

According to the British Printing Industries Federation, the sector employs around 140,000 employees in more than 10,000 companies. What's more, the sector makes a positive contribution to the UK trade balance and if a manufacturing led recovery is to be realised in the UK, the print sector will have an important role to play in this.

Analysis undertaken by members of the Policy Research Institute at Leeds Metropolitan University suggests that many of the top companies in the region are proving to be remarkably resilient during the first part of the recession. Nine of the top 10 businesses this year were in the top 10 last year.

However, there is a striking variation in financial performance apparent among the Top 50 companies, and while care needs to be taken in interpreting the data away from the specific company context, the analysis provides an interesting insight into the state of printing and related sectors in the region.

About four in 10 of the companies in the Top 50 suggest a year-on-year increase in turnover and one in three report a year on year decrease. While some companies reported substantial increases (ranging from 0.3 to 45 per cent), others reported major decreases (-48 per cent) in turnover.

The difficult trading circumstan