marketing information - npes

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NPES

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Reston, VA 20191

T: 703.264.7200

F: 703.620.0994

www.npes.org

MARKETING INFORMATION

1st Quarter 2013

Marketing Information provides readers with market data directly related to

the printing and publishing industry. This publication is a consolidated,

quarterly quick-reference guide compiled from various government and

industry sources, including primary data from the NPES Market Data Program.

Supplemental data are included to provide a complete statistical picture of

the industry.

Table of Contents

In Summary 1

General 1

U.S. Printing Equipment Shipments 1

U.S. Graphic Arts Supplies Shipments 2

Total U.S. Market [Traditional Printing Equipment, Graphic Arts Supplies and Production Digital

Color Presses] Shipments 2

Printing Equipment & Graphic Arts Supplies 3

Total U.S. Market 3

Forecasts 3

Production 4

Producer Price Index 4

Industrial Production 4

Capacity Utilization 5

“Real” Gross Domestic Product 5

Employees, Earnings and Hours 6

Average Number of Production and Nonsupervisory Employees 6

Average Weekly Hours of Production and Nonsupervisory Employees 6

Average Hourly Earnings of Production and Nonsupervisory Employees 6

Financial 7

Magazine Rate Card Revenue & Ad Pages for PIB Measured Magazines 7

1st Quarter 2013 1

In Summary

Commentary on forecast of NPES Printing Equipment & Graphic Arts Supplies

shipments based on 1st Quarter 2013 data

In addition to summarizing recent market developments, NPES is pleased to include printing equipment and

graphic arts supplies forecasts from DeWolf Associates in this section. NPES provides these forecasts as a

service to members to provide a perspective on the future trends in our industry. As you are aware, different

economists use different factors to develop their forecasts. Hopefully, DeWolf’s forecasts will aid you in

arriving at your own "view" of the future. “Growth” as used in this summary refers to yr/yr growth, the

percent growth, month by month, in the most recent twelve months compared to the previous twelve

months.

General

The U.S. economy has had a relatively quiet start to 2013. The overall

economy continues to improve slowly but steadily. Industrial production is

almost back to prerecession levels. The solid recovery in the housing market

will lead to more jobs and more demand for all the products that go into new

homes, from insulation to toilets, to electrical fixtures, to appliances and

even to gardening supplies. Cars sales continue to be strong, representing

build-up demand. Employment is growing, although not as fast as many

would wish. The overall picture is positive, although the rate of growth is

unexciting.

The next business cycle high will be modest and is expected to occur in the second half of 2014. Most yr/yr

growth curves – GDP, Industrial Production, retail sales, vehicle sales – are dipping to a mild low in 2013

before rising to that high. Both printing equipment and graphic arts supplies passed that low in this first

quarter and their growth curves should start to rise for the remainder of the year. Even so, shipments for

both series will end this year lower than 2012. Source: DeWolf Associates

U.S. Printing

Equipment

Shipments U.S. printing equipment

shipments in the first

quarter of 2013 were

$98.9 million compared

to $137.6 million in the

fourth quarter of 2012.

When adjusted for

seasonal variations this is

a slowing of 15.5%.

Shipments were 14.4%

below the year-ago first

quarter and the 12

months ending with

March 2013 were 9.7% below the previous 12 months.

The forecast made last quarter was too high and this forecast has been adjusted downward. The strong fourth

quarter that showed signs of a solid recovery was not matched in this first quarter. Printing equipment

quarterly shipments in 2013 are now expected to be 6% lower than the 2012 total. They will grow by 8% in

2014. Source: DeWolf Associates and NPES

“The overall

economy continues

to improve slowly

but steadily.”

1st Quarter 2013 2

U.S. Graphic

Arts Supplies

Shipments Graphic arts supplies

shipments in the first

quarter of 2013 were

$161.5 million

compared to $170.6

million in the fourth

quarter of 2012, a

seasonally adjusted

slowing of 5.3%. The

quarter was 8.5% below

the first quarter of

2012 and yr/yr growth

was down 7%.

The last forecast for graphic arts supplies was high. Shipments in 2013 are now expected to end the year 2.4%

below 2012. This should be followed by a 2% increase in 2014. Source: DeWolf Associates and NPES

Total U.S. Market [Traditional Printing Equipment, Graphic Arts Supplies

and Production Digital Color Presses] Shipments With the addition

of the production

digital color press

data in 2010, we

now have a more

complete picture

of the industry.

The production

digital color press

data includes light

and heavy

production

equipment sold to

the commercial

and in-plant

printing industry

but does not

include sales of

production devices

to the office market unless it goes to the in-plant printing facility with the organization.

In 2012, the market for production digital presses fell 4% to $1.2 billion and the total market was nearly $2.4

billion, a 5% decrease from 2011. Source: NPES

1st Quarter 2013 3

Printing Equipment & Graphic Arts Supplies

The NPES Market Data Program has been collecting data on the printing industry since 1957. Collecting U.S.

dollar and unit shipments data for 80 key industry product categories, the program has evolved to encompass

several different elements with varying levels of accuracy and relevance.

Total U.S. Market

Printing Equipment

Primary areas: Imaging and Prepress Equipment; Systems and Software; Pressroom Equipment; and, Bindery and Finishing Equipment

Collects nearly 80% of the dollar volume of printing equipment

Graphic Arts Supplies Added in 1980

Primary areas: Film, Plates, Proofing and Chemistries

Collects approximately 90% of the dollar volume of supplies and consumable products sold into the industry

Digital Launched in 2010

Collects data for production digital color presses in various duty cycles

Captures virtually 100% of the U.S Market for these products

Forecasts

U.S. Printing Equipment Shipments [Millions of Dollars]

2010 2011 2012 2013 2014 2015

1ST QUARTER $128.4 (A) $120.5 (A) $115.6 (A) $98.9 (A) $117 $116

2ND QUARTER $101.5 (A) $111.9 (A) $80.2 (A) $89 $97

3RD QUARTER $113.9 (A) $142.4 (A) $126.9 (A) $109 $114

4TH QUARTER $135.1 (A) $121.7 (A) $137.6 (A) $136 $138

TOTAL $478.8 (A) $496.5 (A) $460.3 (A) $432.9 $466

U.S. Graphic Arts Supplies Shipments [Millions of Dollars]

2010 2011 2012 2013 2014 2015

1ST QUARTER $189.1 (A) $179.1 (A) $176.8 (A) $161.5 (A) $170 $167

2ND QUARTER $211.8 (A) $197.3 (A) $176.2 (A) $177 $182

3RD QUARTER $207.7 (A) $185.2 (A) $176.1 (A) $174 $176

4TH QUARTER $208.6 (A) $177.4 (A) $170.6 (A) $170 $170

TOTAL $817.3 (A) $739.0 (A) $699.7 (A) $682.5 $698

A=Actual Source: DeWolf Associates and NPES

Trends at a Glance

PRINTING EQUIPMENT Shipments down 28% in 1st quarter

2013 at $98.9 million

1st quarter 2013 shipments down 14% vs. 1st quarter 2012

2012 shipments: $460.3 million [down 7% compared to 2011]

GRAPHIC ARTS SUPPLIES Shipments down 5% in 1st quarter

2013 at $161.5 million

1st quarter 2013 shipments down nearly 9% vs. 1st quarter 2012

2012 shipments: $699.7 million [down 5% compared to 2011]

DIGITAL Fell 4% in 2012 to $1.2 billion

TOTAL U.S. MARKET $2.4 billion in 2012, fell 5% from

2011

Source: NPES

TOTAL

U.S. MARKET

DIGITAL

GRAPHIC ARTS SUPPLIES

PRINTING EQUIPMENT

$4,1

74

$3,5

75

$2,8

30

$2,4

89

$2,4

87

$2,3

62

2007 2008 2009 2010 2011 2012

Printing Equipment

Graphic Arts Supplies

Digital

Total Market

2012 Total U.S. Market: $2.4B

1st Quarter 2013 4

Production

Producer Price Index

The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling

prices received by domestic producers of goods and services. PPIs measure price change from the perspective

of the seller. A Producer Price Index for an industry is a measure of changes in prices received for the

industry's output sold outside the industry (that is, its net output). The PPI universe consists of the output of

all industries in the goods-producing sectors of the U.S. economy—mining, manufacturing, agriculture,

fishing, and forestry—as well as natural gas, electricity, construction, and goods competitive with those made

in the producing sectors, such as waste and scrap materials. Source: U.S. Bureau of Labor Statistics

The first quarter 2013 average for

printing and related support

activities was 111.9. This was

steady with the fourth quarter

2012 average and a +0.2% increase

over the first quarter 2012

average of 111.6.

Industrial Production

The Industrial Production (IP)

index measures the real output of

the manufacturing, mining, and

electric and gas utilities

industries; the reference period

for the index is 2007.

Manufacturing consists of those

industries included in the North

American Industry Classification System, or NAICS, definition of manufacturing plus those industries-logging

and newspaper, periodical,

book and directory publishing-

that have traditionally been

considered to be manufacturing

and included in the industrial

sector. For the period since

1997, the total IP index has

been constructed from 312

individual series based on the

2002 North American Industrial

Classification System (NAICS)

codes. Major industry groups

include three-digit NAICS

industries and aggregates of

these industries-for example,

durable and nondurable

manufacturing, mining, and

utilities. Source: Board of Governors of the Federal Reserve System

The first quarter 2013 average for printing and related support activities was 76.3. This was a +1% rise from

the fourth quarter 2012 average of 75.4 and a +2% increase over the first quarter 2012 average of 74.9.

83.0

76

.2

74.3

74.9

76.3

79.3

77.4

74.3

75.0

78.7

76.3

74.7

76.1

77.7

74.9

73.7

75.4

2009 2010 2011 2012 2013

Industrial Production

Printing and related support activities (NAICS 323)

[2007 = 100, seasonally adjusted, average]

Qtr 1 Qtr 2 Qtr 3 Qtr 4

109.8

109.3

110.9

111.6

111.9

109.2

109.6

111.7

111.8

108.9

109.9

112.0

11

1.8

109.3

110.5

11

2.1

111.9

2009 2010 2011 2012 2013

Producer Price Index


[Not Seasonally Adjusted, average]


1st Quarter 2013 5

Capacity Utilization

For a given industry, the capacity utilization rate is equal to an output index (seasonally adjusted) divided by

a capacity index. The Federal Reserve Board's capacity indexes attempt to capture the concept of sustainable

maximum output-the greatest level of output a plant can maintain within the framework of a realistic work

schedule, after factoring in normal downtime and assuming sufficient availability of inputs to operate the

capital in place. Capacity indexes are constructed for 89 detailed industries (71 in manufacturing, 16 in

mining, and 2 in utilities), which mostly correspond to industries at the three- and four-digit NAICS level.

Estimates of capacity and utilization are available for a variety of groups, including durable and nondurable

manufacturing, total manufacturing, mining, utilities, and total industry. Manufacturing consists of those

industries included in the North American Industry Classification System, or NAICS, definition of

manufacturing plus those industries-logging and newspaper, periodical, book and directory publishing-that

have traditionally been considered to be manufacturing and included in the industrial sector. Source: Board

of Governors of the Federal Reserve System

The first quarter 2013

average for printing and

related support activities

was 67.0. This was a nearly

+3% increase over the fourth

quarter 2012 average of 65.3

and a +2% rise from the first

quarter 2012 average of

65.5.

“Real” Gross Domestic Product Real gross domestic product is the output of goods and services produced by

labor and property located in the United States. Source: Bureau of Economic

Analysis (BEA)

The BEA indicated that the

“Real” Gross Domestic

Product [Billions of Chained

(2005) Dollars] in the first

quarter of 2013 was

$13,750.1 billion, a +1%

increase over fourth quarter

2012 [$13,665.4 billion] and

a rise of +2% from the first

quarter 2012 total of

$13,506.4 billion.

1st Quarter

2013 “Real”

GDP:

$13,750

billion

$12,7

11.0

$12,9

47.6

$13,1

83.8

$13,5

06.4

$13,7

50.1

$12,7

01.0

$13,0

19.6

$1

3,2

64

.7

$13,5

48.5

$12,7

46.7

$13,1

03.5

$13,3

06.9

$13,6

52.5

$12,8

73.1

$13,1

81.2

$13,4

41.0

$13,6

65.4

2009 2010 2011 2012 2013

"Real" Gross Domestic Product

Billions of Chained (2005) Dollars

[Seasonally Adjusted Annual Rates]


65.9

63.4

63.8

65.5

67.0

63

.7 65.0

63.9

65.4

64.0

65.1

63.6

65.0

64.0

64.0

63.9

65.3

2009 2010 2011 2012 2013

Capacity Utilization


[Percent of capacity, seasonally adjusted, average]


1st Quarter 2013 6

Employees, Earnings and Hours

Each month the Current Employment Statistics (CES) program surveys about 141,000 businesses and government

agencies, representing approximately 486,000 individual worksites, in order to provide detailed industry data on

employment, hours, and earnings of workers on nonfarm payrolls. The data from the CES survey include series

for total employment; production and nonsupervisory employees; women employees; and average hourly

earnings, average weekly hours, average weekly earnings, and average weekly overtime hours in manufacturing

industries for both all employees and production and nonsupervisory employees. CES data are classified

according to the 2007 North American Industry Classification System (NAICS). Source: U.S. Bureau of Labor

Statistics

Average Number of Production

and Nonsupervisory Employees Production and nonsupervisory employees include

production employees in mining, logging, and

manufacturing, construction employees in

construction, and nonsupervisory employees in

private service-providing industries.

The first quarter 2013 average [thousands] for

printing and related support activities was 309.3.

This was a nearly -2% decrease from the fourth

quarter 2012 average of 310.8 and a -3% drop over

the first quarter 2012 average of 318.8.

Average Weekly Hours of

Production and Nonsupervisory

Employees Hours are produced for all private-sector

employees on business payrolls and also for

production and nonsupervisory employees.

The first quarter 2013 average for printing and

related support activities was 38.2. This was a

nearly -2% drop from the fourth quarter 2012

average of 38.8 and a +0.3% increase over the

first quarter 2012 average of 38.1.

Average Hourly Earnings of

Production and Nonsupervisory

Employees

Earnings are produced for all private-sector

employees on business payrolls and also for

production and nonsupervisory employees.

The first quarter 2013 average for printing and

related support activities was $17.71. This was a

+1% increase over the fourth quarter 2012 average

of $17.51 and a +3% increase over the first quarter

2012 average of $17.17.

386.3

345.1

32

9.9

318.8

309.3

373.4

342.5

328.6

319.1

364.1

339.7

32

4.5

315.3

358.9

337.5

31

8.5

310.8

2009 2010 2011 2012 2013

Average Number of Production and

Nonsupervisory Employees


[Not Seasonally Adjusted, Thousands]


37.4

37.8

37.5

38.1

38.2

37.4

38.4

37.8

38.4

38.4

38.4

38.2

38.8

38.7

38.2

38.3

38.8

2009 2010 2011 2012 2013

Average Weekly Hours of Production and



[Not Seasonally Adjusted]


$16.7

6

$17.0

4

$17.2

7

$17.1

7

$17.7

1

$16.6

4

$16.7

8

$17.2

1

$17.1

7

$16.7

2

$16.8

4

$17.3

0

$17.2

6

$16.8

7

$17.0

2

$17.3

3

$17.5

1

2009 2010 2011 2012 2013

Average Hourly Earnings of Production and



[Not Seasonally Adjusted]


1st Quarter 2013 7

Financial

Magazine Rate Card Revenue & Ad Pages for PIB Measured Magazines

A rate card is a document provided by a newspaper or other print publication featuring the organization's rate

for advertising. It contains prices and descriptions for the various ad placement options available from a media

outlet. Source: The Association of Magazine Media – Publishers Information Bureau (PIB), Data as of April 5th,

2013

According to the Publishers

Information Bureau (PIB),

total magazine rate card

reported print advertising

revenue generated for the

first quarter of 2013 was

$4,134,555,314, a +1% rise

from the same period in

2012 [$4,113,328,484].

According to the Publishers

Information Bureau (PIB),

magazine ad pages for first

quarter 2013 totaled 31,137,

a -5% decrease from the first

quarter 2012 total [32,708].

As seen above, print magazines experienced advertising revenue growth in first quarter 2013, despite continuing

softness in ad pages. This is the first ad revenue growth in nearly two years, according to the latest PIB numbers.

More than 61% more titles posted PIB revenue and page gains compared to first quarter 2012.

From a broader perspective, 2012 audience figures for print titles and their digital replicas together have grown

1.6%, adding 13.5 million new readers. Digital-only magazine audiences, while still a small part of the total,

grew 44%. Advertisers are following consumers as they access magazine media content on various channels.

Fifty-seven percent more brands advertised in tablet, online and print editions of magazines in the first half of

2012 compared to the first half of 2011. Magazine Media are meeting consumer demand for content on mobile

devices. The number of magazine-branded apps released in 2012 has grown 281% since 2011. Statement from

MPA – The Association of Magazine Media

$3

,38

2,3

38

,56

7

$4

,04

7,3

37

,27

4

$4

,29

1,6

16

,62

3

$4

,72

4,0

04

,81

3

$4

,92

4,0

42

,81

8

$5

,29

9,0

57

,79

8

$5

,24

5,4

75

,24

6

$4

,21

0,4

10

,30

4

$4

,04

6,6

77

,36

7

$4

,29

4,1

33

,21

7

$4

,11

3,3

28

,48

4

$4

,13

4,5

55

,31

4

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Magazine Rate Card Revenue for PIB Measured Magazines

January-March 2002-2013

Note: Sunday Supplements Excluded

46

,41

3

49

,33

8

49

,27

8

51

,16

9

51

,38

2

52

,53

3

50

,17

0

38

,39

5

34

,88

5

35

,78

8

32

,70

8

31

,13

7

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Magazine Ad Pages for PIB Measured Magazines

January-March 2002-2013

Note: Sunday Supplements Excluded

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