The individual surveys of companies in the print industry vary widely. While some have arrived at around 75 % of the previous year’s level of sales, others have seen their machines standing idle for at least one shift. Is this the calm before the insolvency storm? Is the worst yet to come in the fourth quarter? Dr. Johannes Warther, Senior Consultant at the renowned management consultants Apenberg & Partner, took a closer look at the print industry.
Many renowned institutes have related the course of the current crisis to that of 2009. In contrast to other studies, Dr. Warther not only looked at the respective year of the crisis, but also at the previous year and the following year. The study allows an assessment of how the economic situation in the print industry will develop. How many insolvencies will we experience because of the pandemic, and within what period? What can we derive from 2009?
For a prediction of the further course of events, Dr. Warther relies on the expectations of the Deutsche Bank Research. The economists expect the GDP to fall by nine percent in 2020 and then rise by four percent in 2021.
Gross domestic product Germany
Two factors stand out in particular: First, the 2009 crisis already started in the fourth quarter of 2008, whereas the Covid-19 crisis started in Q1/2020. Second, it is striking that the GDP had recovered to a level above the crisis year-earlier high by the end of the crisis year 2010. By contrast, the forecast for 2020 assumes that the GDP at the end of 2021 will still be considerably below the level of 2019.
The study also looks at how revenue in the print industry has behaved in relation to the GDP. The figures show that the print industry has followed the development of the GDP in the past, even through severe crises.
GDP and the print industry
GDP and the print industry
The prosperity of printers of business stationery is dependent on the GDP. According to the study, it will be very difficult for companies that want to survive in the market solely through low prices. Companies that stand out from the competition with the quality of their products and/or the depth of their value chain, are better positioned and now suffer less. The analysis covers the turnover of the economic sector 18.1 “Production of printed products”. The production of folding cartons and the production of food packaging are not included.
How did the insolvencies develop around 2009? The number of insolvencies increased by 38.7 percent from 2008 to 2009. A comparison of the number of insolvency filings in 2019 and the first quarter of 2020 shows that the trend in insolvency filings has so far been declining.
Assuming that Olaf Scholz has no more powder for a second bazooka shot, a massive increase in insolvencies within the print industry and especially among commercial printers can be expected in the fourth quarter. Assuming that the trend continues in 2021, a large number of insolvencies can still be expected in the first quarter of 2021. All forecasts are based on the assumption that no second wave will bring about a renewed lockdown, the extent of which would be comparable with the slumps of recent months.
