Figures released by the Office of National Statistics at the end of July have revealed that Britain has turned the corner in its recovery, leading to an improved growth forecast from the IMF.
Despite the buoyancy not being felt in every market, the printing sector is certainly experiencing a lift with the general upturn in the economy being felt across the industry.
The preliminary figures for Q2 GDP were released by the Office of National Statistics at the end of July and showed growth of 0.8% in the three months between April and June, leaving it 0.2% higher than the previous high point reached in the first quarter of 2008.
From this peak in 2008 to the lowest trough in the following year, the economy tumbled by 7.2%. However, the UK economy has expanded by 3.1% in the last 12 months alone, helping to return it to its pre-recession position.
This surge has led to a revised growth forecast for the UK from the IMF, increasing its prediction for 2014 to 3.2%, a rise of 0.4%, and also pushing the prediction for 2015 up by a further 0.2% to 2.7%.
These upgrades in growth predictions from the IMF were the largest seen in any of the major western economies.
Although the figures suggest that the economy has returned to pre-recession levels, there are suggestions that the feel-good factor is not universal.
Per capita GDP levels still remain below that of 2008 and wages haven’t met the rate of inflation, leaving spending power lagging behind.
Some experts have suggested that the GDP growth is not as high as being reported, instead being driven by the combined effects of borrowing and increase in property inflation. Ironically, these two same factors are those which were instrumental in creating the recession originally.
However, one sector which is performing well and feeling buoyant is printing, with many companies feeling positive despite the mixed outlook.
In July, the chief executive of BPIF, Kathy Woodward, warned in Print Week that margins were still tight and that the retail conditions were “quite challenging” but nevertheless agreed that the sector was “more buoyant” than before. She went on to say that there was a “real degree of optimism” which hadn’t been present since the recession with a “significant number of members” investing in both systems and support as a result of improved market confidence.
The Printing Outlook Survey completed by BPIF in the second quarter backed up these results, returning a mixed but overall positive conclusion. According to the report, two out of five printers had reported a rise in demand, slightly less than those printers registering no change. One in three companies in the printing sector said their margins had fallen, with just 9% reporting a rise. With selling prices being squeezed, more firms had shrunk their workforce than expanded it as a consequence. Despite this, the sector recorded its best level of first quarter order growth in more than 20 years.
Image Credit: Tony M’Ash