Supposedly, the economy is in a recovery mode. If that’s so, then what’s up with this?

Several of the large players in the printing and graphics industry have recently reported a decline in sales, Q1 2011 vs. Q1 2012, among them:

 - Cenveo

 - Quad Graphics

 - Pitney Bowes (they are not just in the “mailing” equipment business)

 - Consolidated Graphics

 - RR Donnelly

In spite of that, new equipment continues to flood the printing and graphics marketplace.  And, I do mean “flood”.  It’s almost impossible to keep up with all of the new gear companies are introducing.  You have to ask yourself, if printers are experiencing declining, rather than growing, sales, and, if “print-on-paper” is expected to continue to be in a declining mode in the years to come, then how will printing equipment manufacturers continue to be able to justify significant R&D investments in new printing equipment and technology?

One friend put it like this.  “Right now – and continuing over the next few years – we are seeing, and going to see, an explosion in digital printing equipment and technology as digital printing equipment manufacturers (and inventors who license their imaging technologies) push to replace traditional (i.e., offset) printing equipment.”

I “guess” that means that, over the next several years, we’ll be hearing that all of the large offset printing companies will be acquiring new digital printing equipment to replace their analog printing presses.  That’s already happening.  But, that “changeover” from analog to digital is going to be very expensive, and where are the capex funds going to come from if sales continue in a declining mode?

As a “reprographer” by background, I do remember when, beginning around 1995, high-volume-capable, very fast, wide-format, b/w, multifunction, digital scanner / copier / printer / plotters (e.g. OCE 9800) began to make inroads in the reprographics industry - began to replace analog diazo printers, and that process seriously ramped up over the next several years.  But, while reprographers were making the decision to acquire this expensive new stuff to replace their old stuff, sales were booming (because the A/E/C Industry and the real estate development industry were booming!)  It’s certainly much easier to justify significant new capex when sales are booming (and expected to increase from there!)  It’s an altogether different animal when you have to make significant new investments in new printing equipment, when sales are dragging and expected to further decline!  I do think this is going to force further consolidation in the printing industry market.  Darwinian!