This is marketing research on the commercial printing industry and can include information on the background, market structure, definitions, competitors, trends and developments of commercial printing and is related to other topics such as lithography, offset, laser and photography.

Table of Contents

Table of Contents

1 Background 
2 Market Structure 
3 Industry Definitions 
4 Market Metrics 
5 Industry Players 
6 Recent Trends and Developments 
7 Sources

Background

As the twentieth century drew to a close, the U.S. printing and publishing industry experienced unparalleled demand for its products. Despite intense competition from the electronic media and people’s scarcity of leisure time, the industry’s value of shipments from the sale of newspapers, periodicals, books, and trade advertising materials climbed steadily, reaching an estimated $184 billion in 1992 dollars in 1999. Profit margins also advanced, aided by a pattern of low prices in materials costs—especially paper—and gains in worker productivity. Employment in printing and publishing had moderate growth through the decade of the 1990s, exceeding 1.5 million by 1999, but competition and consolidation reduced the number of establishments to an estimated 62,000 in 1999 from 65,000 a decade earlier.

Attending to the informational needs of the huge domestic market is the primary focus of U.S. printers and publishers, but the industry is an active participant in the international economy as well and thus is subject to global forces. These critical forces include changes in technology, new opportunities in global markets, international sourcing of equipment and supplies, and increased cross-border investment. Technology.

The move toward digital (electronic) technology has influenced the world’s publishers as well as printers. The previous technology—analog—was based on film, plate, andchemical processes that required intermediary operations before textual input was ready for the printing press. Digital technology removes those intermediary activities and binds the production ties between printers and publishers more closely. The decades ahead will witness a sorting-out process that will determine which parts of the production process will be done at publishers’ offices and which tasks will be accomplished at the printing plant.

Market Structure

Printing is more than just producing books, newspapers, and magazines. The process printing process also affects other industries including packaging, advertising, textiles, as well as more mundane items suc as currency, wallpaper, postage stamps, product labels, billboards, lampshades, etc.

The printing industry includes establishments engaged in the following:

• Printing on apparel and textile products, paper, metal, glass, plastics, and other materials, except fabric

• Performing prepress (e.g., plate making, typesetting) and post press services (e.g., book binding) in support of printing activities

The process includes lithographic, gravure, screen, flexography, digital, and letter press processes. End users of printing processes include newspapers, magazines, catalogs, signs, brochures, mailings, business forms, other advertising materials as well as the broad range of labels used in product packaging.

Printers and publishers in the world’s major economies face mature domestic markets in which constraints on expansion often encourage a more global view. This is especially true in European countries such as France, Germany, the Netherlands, Spain, and the United Kingdom, where exports of printed products account for 10 to 20 percent of the industry’s total revenues. The United States engages in the world’s largest trade in printed products. Exports of U.S. books, periodicals, and trade advertising materials totaled approximately $4.5 billion in 1999, while imports of printed products reached $3.5 billion. The strongest demand for U.S. printed materials is found in Canada, the United Kingdom, Mexico, Japan, and Australia. Efforts by U.S. printers and publishers to establish larger markets in Latin America and the countries of the Pacific Rim are determined largely by literacy and income levels and the relative strength of regional economies.

Trends in the acquisition of equipment and supplies find the world’s printers and publishersfulfilling more of their requirements from international sources. Digital printing presses from Belgium, platesetters from Canada, and text processors and software from the United States point to the globalization of graphic arts equipment. Material inputs also are sourced globally, with ink supplied by the United States, the Netherlands, and Japan and paper obtained from the United States, Canada, and the Scandinavian countries. To a degree, this trend is countered by the large U.S. market for printed products, which encourages foreign suppliers and equipment manufacturers to establish plants in the United States.

The opening of foreign markets to investment opportunities has been seized on by the world’s major printing and publishing companies. The leading attraction for foreign investment has been the United States, where up to 50 percent of the largest book and periodical firms are foreign-owned and the second largest printer is headquartered in Canada. U.S. printers have sought market opportunities abroad by merging, acquiring, or establishing printing plants throughout Europe, Asia, and Latin America. The U.S. book and periodical publishing industries are also active internationally through product licensing and joint ventures. This expansion of global publishing is in part the result of greater worldwide protection of intellectual property, a priority of the governments in nations with major publishing economies for the last two decades.

Primary raw materials used in the printing industry are paper and ink. Some other materials used in the process include photo processing, plate making materials, oils for machine lubricating, as well as preparation and cleaning solutions. Many types of ink are utilized in printing and vary depending on the procedures and products desired. The printing industry has embraced recent green initiatives and is pushing towards the use of more environmentally friendly inks and solvents.

Industry Definitions

• Digital Printing - used for simple jobs that require quick preparation - it exploits digital imaging technologies and has expanded rapidly in the past 15 years.

• Finishing - a process used after the initial printing sub-process has been completed. This sub-process includes folding, binding, drilling and collating.

• Flexography Press - used to print more flexible materials including plastic or paper bags - it utilizes rubber plates with printed areas which generally have a raised relief.

• Gravure Printing - a more costly, high-quality printing process using a contact between an etched copper plate and the printed paper itself.

• Lithography - a process using oil and water which enables the ink to dry and produce a printed image.

• Offset Lithography - a very widely used process which utilizes multiple printers on different materials. The advantage is less time used in the preparation stage.

• Screen Printing - or silk screening, a process which directs ink through a covering screen. This is often used for products with differnt, non-even surfaces such as clothing.

• Typesetting - this process uses pre-set words which are typeset and then used in a commercial printing press. Today, this process has mostly been digitized.

• Web Printing process - a process used for high volume printing work and uses a continuous roll of paper. The advantage is a faster run time, once prepartion is complete.

Market Metrics

The industry's revenue for the year 2006 was approximately $92,590,000,000. The total United States import export value for the year 2006 was $12,163,624,000. There were 213 countries that conducted foreign trade with the U.S. in 2006, 8 more than year 2005.

The top trading countries were: 


Country			Gross Revenues

Canada			$4,357,731,000 (35.83%)
China			$2,099,394,000 (17.26%)
United Kingdom		$1,092,639,000 (8.98%) 
Mexico	 		$1,027,377,000 (8.45%)
Germany	 		$319,238,000 (2.62%) 

Their combined total represents approximately 73% of all imports and exports. 

The total import value for the year 2006 was $5,791,737,000. 
This represents a 3.8% increase from year 2005. The U.S. had imported industry 
related merchandises from 148 countries in 2006. 

The top importing countries were: 

Country			Importing Revenue

China			 $1,866,378,000 (32.22%)
Canada			 $1,404,965,000 (24.26%)
Mexico			 $488,742,000 (8.44%)
United Kingdom		 $458,878,000 (7.92%)
Hong Kong		 $204,923,000 (3.54%)

Their combined total represents approximately 76% of import from all countries. 

The total export value for the year 2006 was $6,077,626,000. 
This represents a 5.5% increase from year 2005. The U.S. had exported industry 
related merchandises to 207 countries in 2006. 

The top exporting countries were: 

Country			Export Revenue

Canada 			$2,930,170,000 (48.21%)
United Kingdom 		$611,838,000 (10.07%)
Mexico 			$533,754,000 (8.78%)
Australia 		$242,052,000 (3.98%)
Japan 			$195,743,000 (3.22%)

Their combined total represents approximately 74% of export to all countries.

The United States is the world’s largest market for printed products, and with imports accounting for only 1.5 percent of apparent consumption, its needs are met essentially by the domestic printing and publishing industry. Favorable economic and demographic factors expanded U.S. printed product markets throughout the 1990s, and that trend is expected to continue into the new millennium. Demand for printed products is a function of literacy levels, educational enrollment and attainment, disposable personal income, new business formations, and advertising expenditures. Specific factors influencing U.S. markets for printed products are population growth, expansion of the domestic economy, competition from the electronic media, and the printing and publishing industry’s cost structure. Demographics. U.S. printers and publishers have benefited from growth of the population, an increase in educational enrollment, an expansion in educational attainment, and higher levels of disposable personal income. Since 1980, the U.S. population has grown by 44.7 million, and school enrollments by 10 million. The proportion of U.S. high school and college graduates rose to 83 percent and 25 percent, respectively, in 1999 from 67 percent and 16 percent in 1980. Adjusted for inflation, U.S. disposable personal income per capita rose to over $21,000 in 1999 from $14,867 in 1980.

A surging U.S. economy propelled demand for U.S. printed products in the 1990s, a trend that is expected to continue in the decade ahead. Growth of the economy has raised corporate profits and generated an outpouring of expenditures expenditures for advertising. Publishers of newspapers and periodicals are strongly dependent on revenues from advertising, and the U.S. printing industry earns over 60 percent of its income from that source. The creation of new businesses boosts demand for insurance, financial, bank, and legal printing, while higher levels of disposable personal income encourage more purchases of newspapers, books, and periodicals. Tax revenues generated by growth of the economy support the purchase of more instructional materials for school rooms and publications for libraries.

Industry Players

Larger players include RR Donnelley, Quebecor World Inc., Dai Nippon Printing Co. Ltd., in the field of commercial printing.

RR Donnelley is major provider of print and related services, including document-based business process outsourcing. Founded more than 140 years ago, the company provides solutions in commercial printing, direct mail, financial printing, product customization, print fulfillment, forms and labels, logistics, transactional print-and-mail, print management, and other printing paraphernalia. With 2006 revenues exceeding $9.3 billion, the company's net sales were up more than 10.5% as compared with 2005 and have increased by more than 30% since 2004. Income from continuing operations exceeded $750 million, an increase of 66.7% from 2005.

Xaar is one of the leading companies in the supply of high-technology inkjet components and the provision of fully integrated systems.

Quebecor World Inc. is another global commercial printer. They specialize in technological innovation. This company is known for providing flexible, integrated print media solutions to customers. Presently Quebecor World Inc. boasts of revenue of $1.39 billion in first quarter 2007.

Recent Trends and Developments

The printing and publishing industry’s cost structure has benefited since the mid-1990s from low prices for materials, especially paper, and a smooth transition to digital technology. Accounting for up to 20 percent of the industry’s total costs, paper prices have plummeted as a result of collapsed demand from economies in the Pacific Rim. Prices of other material and supply inputs have been held in check by import competition and the strong U.S. dollar. The move toward a digitally-based (electronic) technology has involved high capital investment costs, but the result has been greater productivity and a more highly skilled workforce. These new investments by U.S. printers have increased their plant capacity, leading to more competitive pricing in markets for printed products and intensifying the industry’s movement toward reductions of and consolidations among printing firms.

An expanding U.S. economy, coupled with rising levels of advertising expenditures, should lift the value of shipments of the U.S. printing and publishing industry to $188 billion in the year 2000, an increase in constant dollars of 2 percent over 1999. This growth in demand for printed products should be enhanced by two special events: the Sydney, Australia, Olympics and the U.S. presidential election. The U.S. economy’s strength is expected to keep both corporate profits and tax revenues at the high levels achieved since the mid-1990s, supporting increases in advertising expenditures and increased funding for schools and libraries. Printers’ and publishers’ costs are not anticipated to increase significantly in 2000, since global demand for material inputs, especially paper, remains subdued and rises in U.S. workers’ wages should not outpace the nation’s rate of inflation.

The long-term economic outlook for the U.S. printing and publishing industry is strongly positive. The industry’s rate of revenue growth, adjusted for inflation, should average 3 percent annually over the 5-year period through 2004. This growth rate is predicated on a continuation of the favorable U.S. economic trends experienced since the mid-1990s: low levels of inflation and interest rates, steady gains in school enrollment and tax revenues, and high levels of consumer confidence and business employment. Particularly encouraging is a demographic trend favoring expansion of the U.S. population’s core reading segment (those in the age group 45 and over), which is expected to expand by 10.1 million through 2004. Less encouraging to U.S. printers is the anticipated expansion of U.S. households’ Internet capability, rising to an estimated 40 percent of all households in 2002 from 23 percent in 1998. The transition of some printed materials from paper to electronic format could follow this development, but the Internet’s potential long-term threat appears to lie beyond this 5-year projection period. To date, the Internet has aided publishers’ sales of books and periodicals and has not had an adverse impact on printers’ shipments of catalogs and direct mail materials. U.S. printers and publishers should anticipate greater cost pressures through 2004 as improved global economies lift worldwide demand for paper.

Global Market Prospects

The U.S. printing and publishing industry should have ample international trade and investment opportunities over the next 5 years. Economies in Latin America and along the Pacific Rim are expected to improve, creating increased demand for U.S. printed product exports. Greater enforcement of nternational copyright protection should take place in Asia, the Middle East, and the newly independent states of the former Soviet Union, offering U.S. book publishers wider markets for their products. Growth in the global economy should expand foreign markets for U.S. consumer goods, providing the global advertising support required by U.S. periodical publishers to establish or license more of their titles overseas. In 2006, advertising was the chief revenue producer for commercial printing. In spite of ompetition from other non-print advertising, print advertising continues to grow as print presents greater consumer targeting and the familiarity and portability that many consumers still prefer. Moreover, print is considered to be able to cut through the confusion of other advertising media. Developments in total advertising expenditures also guide print revenues, although to a lesser degree compared to earlier times, taking into consideration current competition between print and electronic media advertising.

Label and wrapper printing are likely to put up the strongest growth through 2011 because of concentration in customized labeling and other higher value printing and domain graphics on such packaging.

US commercial printing revenues are expected to boost 1.3 percent per year to $82 billion in 2011.

Business analysts have come up with an overall general forecast on the commercial printing industry growth:

• 35% of print and prepress firms cite “growing sales/getting new business” as a top business challenge—a strong number, but less important to respondents than “pricing”

• 28% of print and prepress firms cite “making our Web site more interactive” as a top sales opportunity, jumping from fourth to first place

• 21% of print and prepress firms say they offer some kind of new media or non-print services

• 6% of print and prepress firms plan to invest in Web-to-print in the next 12 months

• The number one type of customer cited by print and prepress firms is “non-profits or local community organizations”

Sources

• U.S. Department of Commerce
• RR Donnelley