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    printing outlook  DEPTHS IN Q2 AMIDST COVID



              he UK printing and   forecast (-55). This is the   competitors pricing below   a section on the COVID-19
           Tprinted packaging      worst quarterly report on   normal rates (24%).  restart. The standout issue
           industry hit a record low in   record, undercutting the -51    The notable changes in   preventing full recovery from
           the second quarter of 2020.    recorded in Q1 2009 and the   the priorities are a decline in   the enforced slowdown is
           The COVID-19 outbreak hit   immediate aftermath of the   concern regarding the health   insufficient demand levels
           at the end of Q1, but it is Q2   financial crisis.  & safety aspects of COVID-19,   to sustain business. A ‘lack
           that has taken the brunt of   The output balance of -59   an increase in concerns   of demand’ was by far the
           the impact as both output   was just below the forecast of   about ‘competitors pricing   most commonly selected
           and orders recorded their   -55 for Q2. A balance of +7 is   below cost’ (from 13% to   operational challenge, chosen
           worst ever balances – in line   forecast for Q3.  24%) and Brexit coming back   by 70% of respondents.
           with the forecasts provided   During Q3, output growth   on the radar (up from 6%   The action businesses
           in Q1. But expectations for Q3   is forecast to increase for   last quarter to 27% on this   would most like to see
           reveal some improvement is   36% of companies. A similar   occasion).    Government take is an
           to come, though certainly not   proportion (35%) predict   The latest edition of   extension of the Coronavirus
           a return to pre-coronavirus   that they will be able to hold   Printing Outlook also features   Job Retention Scheme (CJRS);
           normality.              output levels steady, but
            The latest Printing Outlook   29% expect output levels to   Top 3 business concerns – % of respondents selecting
           survey shows that 15% of   fall. That leaves a forecasted         0      20    40     60     80
           printers managed to increase   balance of +7 for the volume   Late payment by customers  35
           their output levels in the   of output in Q3.      Survival of major customers  37
           second quarter of 2020.   Dealing with the economic   Competitors pricing below cost  24
           Fewer (11%) were able to   impact of COVID-19 remains,   Paper or board prices
           hold output steady, whilst   by far, the most important                10
           74% reported a decline in   business concern for     Pre-pack administrations  10
           output. The resulting balance   businesses. It was selected   Weak productivity levels  11
           (the difference between the   by 75% of respondents. The   Profit levels insufficient to ensure…  7
           ups and the downs) was   top three concerns were              Brexit         27
           -59, a further drop from   survival of major customers’   Covid-19 - health and safety  17
           the -43 reported in Q1 and   (37%) late payment by   Covid-19 - economic impact              75
           marginally below the Q2   customers (35%), and
                                                                                           Source: BPIF Printing Outlook

            Volume Of Output – Q2 Deteriorates As Forcast, Decline To Halt In Q3
            % BALANCE            ACTUAL     FORECAST
            60                                                            “Responses to the survey make it clear
                                                                         just how undesirable the lingering
            40                                                           uncertainty is, and how difficult it is
                                                                         to plan; not an ideal time for Brexit to
            20                                                           get back in-the-mix. However, there’s
                                                                         some solace in the fact that we are
                                                                         all in this together; Government is
           -20                                                           listening, and we are communicating
                                                                         with Government; and some companies
           -40                                                           will certainly be looking to benefit from
                                                                         clients reshoring back to the UK.”
                                                                         Charles Jarrold, BPIF Chief Executive
               Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
                     2017        2018       2019        2020
                                                Source: BPIF Printing Outlook
           The output balance of -59 was just below the forecast of -55 for Q2. A balance of +7
           is forecast for Q3.

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