In a presentation at the Book Manufacturers Institute’s Spring Management Conference delivered via videoconference, analysts were optimistic about the recovery of the printing sector and the overall economy despite the severe impact of the pandemic and subsequent lockdown.
BMI executive director Matt Baehr presided over the video conference call which attracted about 44 participants. In an online presentation analysts David Wilaz and Ron Davis reported that over the last 30 days, the printing sector has taken a substantial hit. Overall printing is down about 50%, except for package printing, down only about 15% due to the rising demand for all kinds of nonbook products. And of course, millions of American jobs have been lost, including about 1.3 million manufacturing jobs.
Early in the year, “things were looking great,” according to Wilaz. As fears of the pandemic began to grow in the U.S. in early March, he said book sales in certain categories spiked upwards, driving sales in children’s nonfiction, games and activities, and medical history.
Both analysts were optimistic about the possibility of a fairly quick revival of both the printing sector and economy overall. They foresee a short-term downturn of about 10 months and a return to positive growth “hopefully by early next year.” Davis said the current downturn is “not structural like 2009. We think there will be jobs to return to on this one,” Davis said.
He said that the relief offered by the stimulus package along with “pent up demand” from consumers chafing under the lockdown “will drive recovery.” Wilaz cited a Washington Post survey of workers laid off or furloughed due to the pandemic, in which 77% of respondents said they expected to return to work when the economy reopened.
Davis expects a return to growth in printing in the books category as well as in packaging, labels and wrappers. He described books as one of the better sectors during the pandemic.
Both analysts were unclear about the pandemic’s impact on individual workers on factory floors, and it was unclear how plants were dealing with social distancing directives. They noted that different states had differing criteria for reopening, although they cited reports about the use of glass barriers and Covid-19 testing in workplaces where testing is available.
Kent Larson of Bridgeport National Bindery in Massachusetts, said his workplace was up and running, now redesigned for safety around social distancing. Workers, he said, are allowed to opt-out if they are concerned about coming into work. BNB workers, he said, use masks and gloves on the work floor in addition to social distancing. He also said it was important for plants “to be more concerned about human values than just business.” He said BNB was operating as close to “business as usual as is possible while trying to be safe.”
Looking down the road toward reopening the economy, both analysts cautioned manufacturers to monitor the virus infection rates as states ease up the lockdown. They also took note of the continuing shortage of Covid-19 testing, and pointed out the troubled financial state of the Postal Service.
While the analysts acknowledged that "challenges remain" and that there will be "shakeouts and mergers and we'll lose some firms," they expect the beginnings of a rebound by the end of the year. Davis encouraged manufacturers to “stay positive about your family, your employees and your own health.” Use the forced downtime, he said, to rethink your business models. “There will be new waves of opportunity, print processes and new efficiencies,” he said. “There will be new ways to utilize employees, new ways to cut cost, and new ways to increase sales. The U.S. still has the strongest, most viable economy and political system in the world. In the end, we will persevere.”