Caught in COVID-19’s Crosshairs

Testimonials of Commercial Printers

6790

03/19/2020

Riley McNulty

 

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As the United States grapples with the coronavirus, all levels of government are moving franticly to stem its impact. Social distancing is now the norm. People are curtailing travel and movement, whether it be international or local. Trade shows, conferences, concerts, sporting events, and school activities are cancelled. Homes are transformed into schools and offices. Even trips to local markets are taken with trepidation. Because of all this, people have far fewer occasions peruse programs, see signs, read promotional materials and brochures, or use course packets. This has led to a decline in printing of materials required to inform, educate, sell, amuse, and decorate. Like all companies in services, travel, and entertainment, commercial printers are experiencing the immediate impact COVID-19.

 

Keypoint Intelligence asked printing establishments about the demand and supply side shocks they are experiencing. A commercial printer with nearly 150 employees that runs inkjet, toner, and offset presses indicated that customer demand changes by the minute. Print jobs related to school schedules, conferences, or real estate were immediately cancelled or put on hold. A rough estimate is 50 percent of print volume was put on hold; new orders have dropped dramatically. The only application that has seen some sporadic growth is posters.

 

A large in-plant operation in education didn’t see much impact until last week, when the university and local K–12 community moved to remote learning, and many non-university events began to be cancelled. How the MPS contract the in-plant manages for the university’s MFPs has been impacted remains to be seen. Although there is the possibility of a rise in mailings to promote online events and share information, overall volumes are expected to decline between 35%–45%.

 

A transactional and direct mail printer noted that companies depending on direct mail for acquisition and loyalty—such as temporarily shuttered retail and entertainment-based businesses—have experienced a significant short-term impact. A preliminary near-term estimate is a 35%–45% decline in direct mail spend. However, the transactional side of the business (regulated and compliance communications) has not slowed down. In fact, there is the potential that volumes may increase as in-plants are closed and work shifts off-site to disaster recovery suppliers.

 

Finally, a large business forms printer that has major accounts in medical and financial industries has yet to be impacted. The regulated nature of that market may, in fact, provide a buffer. For this company, it is too early to tell what the impact will be.

 

Thankfully, supply-side shortages for ink, toner, consumables, and paper have not yet occurred.

 

All, however, are experiencing significant challenges related to staffing. Where possible, some employees are working from home—using Zoom, Skype, and email—for at least part of their hours. However, remote working is not an option for most employees. Printing manufacturing plants can’t run without people on-site. Printers are looking at adjusting hours and shifts to minimize how many people are on-site at once, as well as to accommodate children being at home, or (in the worst case) illness affecting their family; this factor is practically changing by the minute.

 

When we arrive on the other side of this moment in history, this industry will survive. Services, entertainment, and retail establishments will reopen. People will resume boarding planes and engaging in business and personal activities. Print, in all its manifestations, will continue to play an important part in business, education, and government operations and communications. However, commercial printers are (for now) right in COVID-19’s path. Those with healthy balance sheets that sell to diversified market segments will come through. When we return to a steady and healthy hum of printing presses, the competitive landscape will have changed, and it will be primarily comprised of the most efficient operations.

 

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