Printers see a slow recovery - effect of recession to printing industry - Industry Overview

Magazines won't rebound before second half, executives predict.

The pervasive doom and gloom inspired by the continuing recession showed a few early signs of giving way to better times, as printers and paper suppliers gathered in late February for the Graphic Communications Association's annual meeting.

But if the printers are reading their magazine customers correctly, that nascent recovery will have no impact on advertising or circulation until the second half of 1992, and some printers predict it may be early 1993 before a major revival takes hold.

And even then, nobody is predicting a return to the good old days of the late eighties, when many books expanded their ad-page counts at a double-digit pace. Advances this time around will be slow and hard-won, printers say.

Bottom of the trough

"Psychologically, we're in a better mindset than we were a year ago," says Terry Tevis, president of New York City-based American Signature, "but it hasn't translated into any significant advances in circulation or ad pages for magazines, and I dont' see it happening before the second half of the year. I don't see signs of further bloodletting, though," he adds. "We're at the bottom of trough."

While the GCA conference was under way in Palm Beach, Florida, the national economy was beginning to show the first signs of shaking off the recession. Among the positive indicators: On the opening day of the conference, February 19, the Dow Jones Industrial Average was climbing 5.59 points to close at 3,230.32; the U.S. Commerce Department said housing starts were up 5.5 percent in January, compared to December; and the Federal Reserve's M1 measure of money growth hit double digits even while inflation was held down by the Consumer Price Index increasing only 0.1 percent on the month.

"I think we're seeing the economy start to turn," says Stuart (Mike) Smith, president and CEO of Hanover, New Hampshire-based Dartmouth Printing. "But I don't think it will hit our field until the fall of 1992 at the earliest."

One of the more optimistic notes was sounded by William Guthrie, senior vice president at Waseca, Minnesota-based Brown Printing Company, who says, "I'm starting to hear that there is some optimism for the end of the second quarter." However, he concedes, "Everyone we talk to truly believes that we will never go back to the way ad pages were in the late 1980s."

But Ann Marie Bushell, vice president of the magazine group at Chicago-based R.R. Donnelley & Sons, sounds a note of caution. "From what we hear, this year is not going to be very different from last year."

That scenario was supported by John Anderson, senior vice president, marketing and sales at Washington, D.C.-based Judd's Inc.: "We've done an extensive survey of all our major customers and prospects, and ad revenue is expected to be flat for eight out of 10 of them."

Craig Hutchinson, president and CEO of Waterloo, Wisconsin-based Perry Printing Corp., notes that some trade and business-to-business categories are shaking out of the recession earlier than the consumer titles. "From a consumer point of view, our customers are not looking for any major rebound until the third quarter. But in business and trade, we see some real signs of growth, particularly in the medical fields and in the computer publications we print."

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