Print sector review

Print sector review

 

Welcome to the Close Brothers Asset Finance update of the Print industry. In this document we highlight a wide range of issues relevant to SMEs in this industry. 

The results are based on the Close Brothers Business Barometer, a quarterly survey of close to 1,000 SMEs across the UK conducted by specialist independent researcher, GMI, on Close Brothers’ behalf. Where relevant, comparisons are made with national sentiment. 

The commentary in this review focuses on: 

  • Economic outlook 
  • Concerns & priorities 
  • Brexit
  • Tax 
  • Plastic waste 
  • High street 
  • Heathrow 
  • Finance requirements

 

Print review: The Economy

Economic outlook

Print SME business owners are less optimistic about their economic outlook than their peers in other industries, with 39% concerned that the economy could decline again; the UK-wide figure is 17%.

A further 23% feel that the worst is behind us, but it will be a slow path to prosperity (UK: 32%) – only 8% are actively positive compared to the UK figure of 33%.

Q: How would you best describe your business's current economic outlook?

 

UK average

Print

Confident that the economy will continue to grow

33%

8%

The worst is behind us but it will be a slow path to prosperity

32%

23%

The worst is behind us but I'm concerned that the economy could decline again

17%

39%

I don't think there is any true economic growth

12%

15%

The economy is worsening

6%

15%

Looking ahead, two thirds of Print firms expect their performance to remain static, while 15% are hoping to expand their operations, which is significantly less optimistic than the UK average of 33%. The remaining 19% predict their business will contract, which is more than double that of the UK average of 8%. 

 

Print review: Competitors

Concerns & priorities 

‘Competitors’ have leapfrogged ‘cash flow’ as the biggest concern for businesses in the Print industry, with ‘finding extra working capital’ also rising up the table. 

Q: What is your main business concern? 

 

UK

Print

Competitors

18%

31%

Cash flow

25%

23%

Finding extra working capital

12%

15%

Late payments

13%

12%

Lack of skilled staff

11%

8%

Tax / VAT

8%

8%

Bank charges

3%

4%

Access to good financial advice

2%

0%

Managing expansion

8%

0%

 

At 31%. ‘Achieving growth’ remains the Print industry’s main priority, although ‘developing new products and services’ – at 27% - is becoming more of a focus when contrasted to previous reviews. ‘Business consolidation’ and ‘paying down debts’ – at 23% and 19% respectively - are the third and fourth most important priorities. 

 

Brexit and the impact on the supply chain

Despite 42% of Print businesses exporting to the EU (UK average – 40%), compared to other industries Print appears to be less exposed to the potential impact Brexit may have on the supply chain, with only 23% of those polled having started planning for the various possible outcomes, which is less than half of the UK average of 47%. 

Only 19% will be impacted if Brexit slows the movement of goods through the supply chain, which is around half that of the UK average of 36%. At the same time, 11% feel they will actively benefit from a reorganisation of the supply chain, with 27% convinced they will ‘suffer’. The remaining 62% are unsure of how they will be impacted, which mirrors the views of the rest of the UK. 

 

Tax and public services 

Less than four in 10 of Print businesses polled are prepared to pay a higher percentage of corporation tax if they knew it would be ring fenced to pay for better public services; 46% would not be while the remainder are ‘unsure’. Interestingly, when answering on behalf of their employees, this figure rises to 54%. 

When asked about their opinion on how tax is spent, only 27% feel that tax revenue is efficiently allocated to the areas that need them, which is significantly less than the UK average of 39%. 

Q: Do you think the tax you and your business already pays is efficiently spent?

 

UK average

Print

Yes

39%

27%

No

39%

50%

Hard to say

23%

23%

 

Print review: Plastic waste problem

Plastic waste 

Nine out of ten Print firms think that plastic waste is a problem, while 58% already have initiatives in place to reduce the amount of plastic waste they generate. 

Less than a quarter (23%) of Printers feel there are  enough incentives in place for businesses to reduce the amount of plastic waste they use and produce, which is significantly lower than the UK average of 42%. 

 

State of the High Street 

According to most Print businesses (81%), the British high street is in decline, with 50% going as far saying it is inevitable it will eventually disappear and citing paying for parking and business rates as the biggest causes of problems on the high street

To combat this decline, 66% of those polled have turned to alternative sales channels, including online. Only 19% haven’t noticed a change in shopping habits. 

More generally, 77% don’t feel enough is being done by the government and local councils to encourage the health of the high street. 

 

Heathrow – third runway 

Print businesses are ambivalent about whether a third runway at Heathrow is the right decision for the UK, with 39% being in favour and 35% against; the remainder are ‘unsure’. 

Only 19% feel they will benefit (UK average: 27%) from the additional capacity the third runway at Heathrow will create, and at a proposed cost of £14bn, barely 15% believe it represents value for money, compared to the UK average of 40% who feel that it does. 

 

Finance requirements 

In common with many other industries polled, 61% of businesses in the Print industry are still finding accessing finance a ‘challenge’ despite the prevailing view that borrowing has never been easier. 

Even with the challenging environment, 42% of Print firms will be looking to invest in their business over the coming 12 months. 

Print review: finance challenge

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