Survey Shows Printing Industry Profits Fall

The sluggish economy and slowing print markets continued to pull down printers’ profitability over the prior year. Profits as a percent of sales average 1.5% for all printers participating in the 2009–10 Ratios Survey. This is a decrease of 1.6% from last year’s average of 3.1% and the first consecutive decrease since 2001. At this rate the industry will earn approximately $2.5 billion in total profits over the course of the year, down significantly from the prior year’s approximate $5.4 billion in total profits.

The industries profit leaders (printers in the top 25% of profitability) saw their profits drop slightly over the year, decreasing to 9.4% the previous year. For all printers the average profit of 1.5% approximately equals the rate earned in 2003, the year after the bottom of the last recession.

In 2009 materials accounted for the largest single cost category for the typical U.S. printer, approximately 35.1% of sales. Paper alone consumed more than one-in-five sales dollars last year. Other major costs incurred by printers last year included factory payroll (25.3% of sales), factory expenses (17.6% of sales), administrative expenses (9.9% of sales), and selling expenses (8.1% of sales).

Total materials expenses increased from 35.0% of sales in the 2008 study to 35.1% of sales in the 2009 survey. Printers also spent more on factory expenses according to the 2009 survey, with increased direct wage costs (15.3% of sales in 2008 vs. 15.7% in 2009) constituting most of the increase. Selling expenses in 2009 increased from 9.0% in 2008 compared to 9.2% of sales in 2009, at the same time administrative expenses increased from 9.7% of sales in the 2008 study to 10.2% percent of sales in the 2009 study. 

Sales per employee for all printers increased by less than 1.0% in 2009 to $146,960 (up from $146,247 in 2008). Profit leaders, as always, had significantly higher productivity rates than all printers. But in contrast to the gains in Productivity Measures attained this year in the all firms category, profit leaders experienced decreases in all four productivity measures (sales per employee, sales per factory employee, value added per employee, and value added per factory employee) , compared to the numbers for the year earlier.

Printers use the Ratios reports to evaluate their performance against industry profit leaders. Specific reports are available for various firm profiles by size of firm, printing process, and print market segments.          

To order your Ratios Volume call (866) 855-4283 or go to www.printing.org/ratios. For more information contact Ed Gleeson at 800-910-4283, ext. 756 or egleeson@printing.org.