Falling demand from print advertising has resulted in significant revenue declines
New York, NY (PRWEB) February 19, 2015
The Printing industry has faced significant challenges over the past five years, largely stemming from increased competition from digital media. From 2010 to 2015, industry revenue is expected to decrease slowly The industry has experienced significant setbacks due to declining demand from print advertising in newspapers and magazines, a trend that was exacerbated by potential customers becoming more accepting of electronic books and computer tablets. In fact, printed business forms, financial documents and annual reports have been facing similar competition from online mediums. Meanwhile, declining exports due to lower demand from the US market, Canada's largest trading partner, have compounded these losses. In 2015, industry revenue is expected to marginally increase, mainly attributed to the digital printing segment.
The Printing industry is fragmented with the vast majority of companies operating on a local level with fewer than 10 employees. With declining demand from the majority of its downstream markets, a number of these small-scale companies have exited the market. Furthermore, downward pressure on unit selling prices has kept profit margins in check. According to IBISWorld Industry Analyst Omar Khedr, “Printing requires substantial capital investment in new technology to remain competitive in times of excess capacity.” Due to the relatively low amount of customer orders, overcapacity has contributed to the long-term trend of industry consolidation amongst larger industry operators seeking to maintain healthy profit margins. In the five years to 2015, the number of printing companies has fallen slightly.
The Printing industry has a low level of market share concentration. In 2015, the top four companies in the industry are expected to generate a small percentage of total industry's revenue. This represents an increase from 2010. This trend towards consolidation has been spearheaded by large industry players. In particular, TC Transcontinental Inc., the industry's leader, acquired a significant market share over this period, partly due to its recent acquisition of Quad/Graphics' Canadian printing operations. RR Donnelley, another prominent competitor, also increased its share of the market through the 2010 acquisition of Bowne & Co. (for further information, refer to the Major Companies section).
The majority of commercial printers in Canada are small privately-owned companies. According to the latest data collected by Statistics Canada, about a third of Canadian printers do not have regular employees and more than half operate with fewer than 10 employees. “The industry is highly fragmented with the majority of commercial printers operating within a narrow geographic market in close proximity to publishing, financial, retail and manufacturing clients to limit shipping costs,” says Khedr.
While the Canadian economy is expected to grow steadily over the five years to 2020, there will not likely be any relief on the horizon for the Printing industry. Over the next five years, this industry is expected to continue its long-term decline, with revenue anticipated to fall slowly. Furthermore, the Printing industry will continue to be hampered by the continued shift toward electronic media, which will adversely affect demand for print from the newspaper, magazine and book publishing markets. However, printers specializing in printing packaging, labelling and wrapping will likely experience stronger-than-average performance, given the segment's resistance to competition from digital media.
For more information, visit IBISWorld’s Beer, Printing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that primarily provide commercial printing services including lithographic, gravure, flexographic, letterpress and digital printing services. Printers also provide screen printing on stationery, labels, apparel and textile products. This industry also includes companies that print and bind books and pamphlets without publishing.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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