Friday, May 13, 2011

Employment continues to shrink in the printing industry (and, I suspect, in the reprographics industry)

On September 20th, 2010, an article appeared on MarketWatch that started out with this paragraph:

“WASHINGTON (MarketWatch) — The U.S. recession that began in December 2007 ended in June 2009, making the 18-month slump the longest since the Great Depression, according to the National Bureau of Economic Research.”

This morning, I came across some numbers – printing employment per the U.S. Bureau of Labor Statistics - that Dr. Joe Webb published in an article on Dr. Joe Webb is a pre-eminent economist/statistician who frequently publishes opinions and statistics about the printing industry; in particular, about the economics of that industry.

I’m going to now share with you the “employment numbers” in the printing industry, 2006 through 2011, and, afterwards, of course, I’m going to make some comments.

NAICS 323 Printing Employment

(source: Bureau of Labor Statistics)

Production Workers (thousands)

Change vs. prior year























“Job losses”, cumulative, 2006-2011 = 116.1 (in thousands)

“Change”, cumulative, 2006-2011 = -25.9%

Joel’s further comments:

I don’t know if these numbers include “reprographics” industry production workers or “just” printing industry production workers. I’m pretty sure, however, that the cumulative percentage change in the reprographics industry, 2006 to 2011, is greater than -25.9%. It’s very likely that the reprographics industry has lost 30-40% of its production workers since 2006. (If you want to take a closer look at this, ARC, in its 10K reports, reports the approximate number of employees on board, so, if you look back at ARC’s 2006 and 2007 and 2010 employee numbers, you should be able to see how large the employment drop-off has been in the “reprographics” industry. What’s happened at ARC, employee-number-wise, 2006-2011, has pretty much happened in the reprographics industry as a whole.)

These numbers are staggering and sobering! And, here’s what’s really bothering me about these numbers.

a) The recession, s-u-p-p-o-s-e-d-l-y, ended in June 2009.

b) Printers (I’m speaking about the “printing” industry, not the “reprographics” industry) have reported improvements in their sales revenue numbers in 2011 vs. 2010; the printing industry is experiencing “a recovery.” Not a great improvement, mind you, but any improvement is better than no improvement.

c) But, in spite of the improvement in their sales revenues, “printers”, apparently, are continuing to reduce jobs. Is “technology” driving further job losses?

Most “reprographers” would, I think, agree that A/E/C customers are printing less (per-project) than they did in the past. “Printers”, I’m sure, realize that their customers are not “printing” as much stuff as they used to. The Internet has reduced the need to print. PDF files have reduced the need to print. Laptops and iPADs (and other similar devices) have reduced the need to print. If printer “sales revenues” are going up, but printer employment numbers are continuing to drop, then what does that say about the future of the “printing” industry … and, likewise, about the future of the “reprographics” industry? This morning, I published an article on the blog to alert my blog-visitors to a discussion – on LinkedIn (in the “Apprentice Group”) – that’s been going on for the last 2 or 3 days. That discussion is about “change”. That discussion is exploring the continuing relevancy of reprographers – and the industry as a whole. A few years ago – at an IRgA Convention – the C.T.O. of BPI Repro, NYC (by then owned by ARC) said during a panel discussion (as best I can recall) that “in the future, reprographers will not be printers, but ‘information managers.’” The BIG QUESTION, BACK THEN AND STILL NOW, is, if reprographers are going to print less in the future than they are now or have in the past, then how will reprographers survive the revenue-loss-impact (not to mention the gross-profit-loss-impact) of this change? If you’re a reprographer and you employed 100 people when things were hot and heavy back in 2006, how many employees do you now have, now that we’re in May 2011? And, if plan and spec printing, per project, continues to decline in the future, even when the A/E/C industry recovers, how many employees (and how much production center space) will you need in the future if your company morphs into a business that generates 50% or more of its revenues from providing “document management” (DM) services and 50% or less of its revenues from “printing services”? And, if your revenue mix, a couple of years beyond that, “splits” 75% DM and 25% prints-on-paper, how many employees (and how much production center space) will you need then? I’m hearing a lot of reprographers say that “DM” is the wave of the future and that, in order to remain relevant to A/E/C customers, reprographers have to be capable of offering , and will have to offer, “DM” services to their A/E/C customers. (And, of course, many are already doing that.) The BIG QUESTION is, will there be enough of a demand – for “DM” services - to support all of the reprographics companies who now operate in the reprographics industry? Or, are we looking at a “further shrinking” of the industry? If in 2006, gross revenues of reprographers, collectively speaking, were around $5 billion, where has that number fallen to at this point? And, where will that number be two or three years from now, even after the A/E/C industry has recovered? Don’t put off planning your future. Not only do you need to figure out how to ensure that your company (your services) will remain relevant to your customer base, you’re also going to need to determine what your company’s needs are going to be, down the road, in terms of production center space and team members. Good luck with your planning process. And, be kind to your production workers.

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