June 06, 2012 - 2:39pm
The release today of economic growth data shows the Australian economy grew strongly during the March quarter but the printing industry continued to remain in a recession.
The economy expanded in trend terms by 0.9 per cent during the March 2012 quarter which helped to lift the annual growth rate to an impressive 3.6 per cent.
Contributing to growth during the quarter were household consumption and non-dwelling construction while net exports (exports less imports) detracted from growth.
At an industry level, agriculture, mining, financial and insurance services, professional scientific and technical services, public administration, health care and social services all made positive contributions to growth on a trend basis.
Once again there were wide differences in final demand growth rates between the states and territories with the resource rich states of Western Australia and Queensland growing at robust annual rates of 13.6 per cent and 7.8 per cent. The services/manufacturing based states of New South Wales and Victoria grew at very modest annual rates of 2.1 per cent and 1.9 per cent respectively. South Australia grew by 0.7 per cent, the Australian Capital Territory by 3.2 per cent and Northern Territory by an impressive 15.1 per cent. Tasmania contracted by 0.2 per cent.
All the major economic data for the printing industry covering the March 2012 quarter has now been released and it does not make for happy reading. The reported outcomes for the printing industry during the March quarter are all in a downward direction.
New capital expenditure was reported to have declined by 13.0 per cent compared to the previous quarter. For the year to March the industry undertook some $266 million worth of new investments representing an improvement of 12.9 per cent on the previous period's reported outcome.
Based on capital expenditure expectations, some $200 million of investment is in the industry's investment pipeline.
Printing industry sales contracted by 4.9 per cent during the quarter and the reported $7,870 million sales figure during the year to March represents a deterioration of 4.5 per cent on the previous period.
The decline in industry pre-tax profits during the quarter was in the order of 5.3 per cent. Despite the poor outcome, pre-tax profits improved by 6.0 per cent for the year to March.
Finally, economic growth date confirms that the printing industry recession continued for another quarter. The printing industry contracted by 5.3 per cent during the March quarter compared to the previous quarter, which was the third consecutive quarter of reported decline. The actual reported March outcome was 13.6 per cent lower than the same period a year earlier.
The industry gross value added declined to $3,915 million during the year to March representing deterioration of 4.3 per cent on the same period a year earlier.
Commenting on the economic data Printing Industries National Manager for Policy and Government Affairs, Hagop Tchamkertenian, said there is no longer a distinct correlation between growth at the Australian economy level and the printing industry.
"The Australian economy grew at trend levels during the March quarter yet the printing industry continued to remain in recession. It is remarkable that whilst the economy grew by 3.6 per cent compared to the same period a year ago, the printing sector contracted by 13.6 per cent over the same timeframe," he said
Mr Tchamkertenian said that while some of the growth enigma can be explained by the rise in significance of the resources sector, the fact that other sectors that traditionally provided positive stimulus to printing such as financial, insurance, professional services and administrative services, are failing to pull the sector out of its recessionary state. This suggests that the growth problems facing the printing industry are now fundamentally structural.
"The rise of alternative communication channels no doubt has eroded the market power of print and as a consequence, the traditional factors that used to influence printing industry growth have weakened," he said.
Mr Tchamkertenian said industry sales had now fallen for three consecutive quarters with the aggregated decline during that time representing some $244 million worth of sales.
"This means the industry has lost the capacity to support more than 1200 jobs during that period." he said
Industry profitability is also coming under considerable pressure with the data showing that industry pre-tax profits fell significantly during the past two quarters.
"Yesterday the RBA cut official interest rates, a development that in normal economic circumstances would have been welcomed as providing needed stimulus to the economy.
"But as we see from today's economic growth figures, the current problem is not lack of growth, but the nature of the growth," Mr Tchamkertenian said.
He said with growth remaining a challenge for many printing industry participant, it was critical that they start to concentrate on new sources of generating growth.
"The role of innovation is increasingly becoming crucial as a driver for growth.
"Given the mature nature of the industry one way of continuing to remain young and vibrant is by engaging in ongoing innovation," Mr Tchamkertenian said.
Printing Industries is emphasising the innovation theme and has partnered with the Hargraves Institute to run a national seminar series as part of a program helping to educate the industry on the importance of business innovation.
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