Lockdown figures: Production on the floor, packaging in progress


In mid-March, when we were advised to maintain social distancing in order to stem the spread of the coronavirus, when schools and public buildings were closed to the public the following day, when offices were abandoned because thousands of employees were sent to work at home, and when even industrial companies stopped their assembly lines, public, cultural and social life simply came to a standstill. Such a lockdown has probably never been seen before. The fact that the borders with neighboring countries were also closed only painted an even bleaker picture.

Pressure and the media have also suffered from the crisis. The bitter truth is that the printing industry has been greatly affected due to its strong integration with other industries and its resulting dependence as a service provider. Considerable revenue losses are becoming apparent. And to make matters worse, print as a so-called downstream industry will continue to feel the consequences of the lockdown even when other sectors of the economy are already recovering. This makes it all the more important to know just how strongly these effects will impact the printing industry and its divisions.

Trend Barometer

However, until a few days ago there was a lack of figures. The Austrian Printing & Media Technology Association was the first to publish the results of a survey in mid-April. According to the survey, 90% of the printing companies reported a decline in sales, one third stated a decline between 30% and 50%, another third between 51% and 80%. As of March, only 14% had already suffered a near total loss of sales. Here too, printers are struggling with a lack of orders (98%), cancelled orders (70%) and outstanding invoices (29%).

The situation for the second quarter looks even worse. Here 31% of the printing companies are expecting a drop in sales between 31% and 50% and 50% are expecting a drop between 51% and 80%. 90% of the printing companies have announced short-time work, 42% have applied for subsidies, while 10% have already had to lay off employees and 60% have sent their sales force to home offices.

sourc-e GmbH and f:mp (Fachverband Medienproduktion) have also initiated an interesting information platform for printers and print buyers.  Participation in the survey and registration for the results is possible on the sourc-e website. The results are summarized in a weekly trend barometer and showed after the first weeks of the survey for both web and sheet-fed offset as well as digital printing that orders and production declined between 45% and 60% compared to the originally planned volumes.

94% reported losses in turnover

The Bundesverband Druck und Medien (bvdm), an association for the German printing and media industry, also requested an online survey, which ran until 26 April 2020, the results of which are already available. 653 printing companies took part in the survey, 78% of which have less than 50 employees and 18% are medium-sized companies. This corresponds to the structure of the industry. About 68% of the participating companies are mainly active in the advertising and commercial printing sector. This too is typical but at the same time disastrous.

94% of the companies are affected by declines in orders and cancellations, 75% severely. One third of the companies expect to halve their turnover in the second quarter of 2020 compared to the same quarter of the previous year. Another 37% expect revenue losses of 26% to 50%. Short-time work compensation and government emergency aid programs were the most important crisis helpers until the end of the survey period.

However, it can be assumed that the need for loans will increase as the crisis continues. The bvdm survey shows that, under the current circumstances, only one in five companies will be able to maintain their existence until the end of June 2020 at the latest, while another 24% have said they would be able to hold out until July. This means that in the worst-case scenario the number of companies would almost halve in the summer.

Moreover, something else could have a devastating effect on the structure of the industry. Should it be the case, that many companies that are already almost at their limit, would have to cut staff despite a shortage of skilled workers due to projects being postponed or investments cancelled, the sector would paralyze itself because it would not be able to serve its customers adequately after they had been restarted. With fatal consequences.

“Turnover is plummeting, morale is in the gutter: The Corona crisis is hitting printing companies and online print with full force. If the slump in sales continues on this scale, things will be tight for many companies. For almost half of the companies, liquidity reserves will only last until June. What then?” – Bernd Zipper.

Heidelberg presents the Print Media Industry Climate Report

Based on the above figures, initial estimates can be made as they are largely congruent. With the Print Media Industry Climate Report, Heidelberg now offers a map that is updated weekly and shows the development of print volumes for the global packaging and label markets and commercial printing. As Heidelberg distinguishes between the packaging and commercial printing segments, the figures, which previously tended to be generalized, are now more precise.

The interactive map on the Heidelberg homepage allows a closer look at individual countries and a comparison of the figures. This report is based on around 5,000 offset presses of all format classes that are connected to the Heidelberg cloud and send data records and machine logs on a daily basis. This data pool, which is actually used for service calls and benchmarks, also makes the capacity utilization of the companies transparent and now allows an assessment of the current situation.

Source: Heidelberg Print Media Industry Climate Report

Current data for around 50 countries are thus determined and displayed on a world map. The colors shown on the country map are indicators of where current production in printing companies is in comparison to the previous year. The scale ranges from 1.0 (serious effects of COVID-19 on production) to 8.0 (production above last year’s level), with 7.0 representing production at last year’s level.

The main findings of the report

  • During the corona pandemic, print production in China fell by up to 80% compared to normal volumes but recovered as the infection curve fell and is now back to last year’s levels in both the commercial and the packaging/label segments.
  • The packaging and label segment appears stable in the corona period, mainly due to the increasing demand for food and pharmaceutical packaging. Nevertheless, local supply problems, such as the discontinuation of paper production in India in some regions, are having a negative impact on this segment.

For the countries in the D/A/CH region (Germany, Austria, Switzerland), the packaging printing segment also shows a uniform value of 7.0. This means that packaging printers are operating at approximately the same level as in the previous year.

  • In commercial printing, print production was stable until mid-March 2020 or exceeded the level of previous years. With the outbreak of the corona pandemic and the lockdown in the individual countries, the print volume worldwide, especially in the commercial market, has decreased significantly.

Germany, Austria and Switzerland were hard hit. For all three countries, the Heidelberg Report shows only 40% of the normal production level. The score value for Germany is given as 1.8, as some companies are registering a complete shutdown. At 2.1 (Austria) and 2.2 (Switzerland), the situation is not much better for its neighbors. Weekly updates can be found here.

My Take: None of this is looking very good. Tax deferrals, short-time work money and immediate aid are certainly helpful at the moment, but they don’t seem to me to be very future-oriented. That’s why we have to think about what comes next. No one had a master plan for the pandemic and the lockdown. But it has already become clear how important digitization is for all of us. We have to keep at it. Therefore, the next few weeks will be a critical time in determining which course to take. We will continue to work on it.
Lockdown figures:  Production on the floor, packaging in progress
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Lockdown figures: Production on the floor, packaging in progress
In mid-March, when we were advised to maintain social distancing in order to stem the spread of the coronavirus, when schools and public buildings were closed to the public the following day, when offices were abandoned because thousands of employees were sent to work at home, and when even industrial companies stopped their assembly lines, public, cultural and social life simply came to a standstill.
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Founder and CEO of zipcon consulting GmbH, one of the leading consulting companies for the print and media industry in Central Europe. The technology and strategy consultant and his team actively support practical implementation in a wide variety of customer projects. His work involves developing visions, concepts and strategies for the players active in the print production process across a wide range of industries. His areas of expertise include online print, mass customization, strategy and technological assessment for print, and the development of new strategies in the print and media environment. Bernd Zipper is the creator and chairman of Initiative Online Print e.V. and, in addition to his consulting activities, is an author, lecturer and sought-after speaker, orator and moderator. His visionary lectures are regarded worldwide as trend-setting management recommendations for the print and media industry. (Profiles also in Xing, LinkedIn).

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