Business sentiment in the Australian print industry has now fallen to its lowest level since the period of the global financial crisis, according to the latest trends survey report from Printing Industries.
The release of the March 2012 quarter report confirms that trading conditions in the printing and associated industries deteriorated in line with seasonal factors.
Hagop Tchamkertenian, national manager for policy and government affairs at Printing Industries says the March 2012 quarter outcomes represent the 17th consecutive quarter where reported industry outcomes came in below expected outcomes for a host of economic indicators.
Some 86.7 per cent of survey respondents ranked lack of orders as the primary barrier to increasing production levels, an outcome that is slightly lower than the 88.9 per cent proportion reported during March quarter 2011
According to Tchamkertenian , over the outlook period industry respondents are forecasting net balance improvements to take place in a number of key economic indicators. Based on these forecasts the June 2012 quarter is expected to yield the following results:
- Net balance increases in orders, production, sales and net profits;
- Reduced employment and overtime levels;
- No change in availability of finance;
- Increased availability of labour;
- Further falls in selling prices;
- Reduced stock levels;
- Further net balance increases in all production cost categories - average wages, other labour costs, and average material costs; and
- Increased number of outstanding debtors.
The outlook for general business expectations over the next six months remains mixed with respondents from New South Wales, South Australia, and Queensland forecasting improvements, while respondents from Tasmania and Victoria are expecting deterioration, and no change is being forecast by Western Australian respondents.
Respondents from Queensland reported the highest utilisation rates with 62.5 per cent of respondents operating at capacity utilisation levels of 70 per cent or more, followed by respondents from Western Australia (60.0 per cent), New South Wales (54.5 per cent), Victoria (51.9 per cent), South Australia (50.0 per cent), and Tasmania (40.0 per cent).
Most sectors are forecasting improvements or no change to take place in general business conditions during the next six months, while Trade Binding, Business Forms and Continuous Stationery, Books, Magazines, Periodicals and Newspapers, Paper Merchants and Labels are forecasting deterioration in business conditions.
Despite the grim news, Tchamkertenian says that industry forecasts for a range of key indicators have now firmed and should hopefully result in a pick up of economic activity in the printing and associated industries over the next three months.
He says, “Over the past four years or so, the industry has tended to be overly optimistic in its projections concerning trading conditions. Now they are once again forecasting improving trading conditions over the June 2012 quarter. It will be interesting to see whether this time, expectations will be met.”
Tchamkertenian adds a potential interest rate cut by the Reserve Bank of Australia could help industry projections to materialise.
He continues, “An easing of monetary policy conditions would be a welcome development as it would help lift consumer sentiment and drive consumption activity which is an important driver of economic activity in the printing industry.”